Ark. Code Ann. § 23-10-407 — AR Code / Title 23 / Chapter 10 / Subchapter 4 / Section 23-10-407
Reasonable rules for transportation of freight permitted
Status: in_force

(a) It shall be lawful for railroads to prescribe rules for the transportation of merchandise, livestock, and other freight that are reasonable and not inconsistent with the common law or statutory duties and liabilities of railroads as common carriers. (b) The reasonableness or unreasonableness of the rules shall be determined by a jury in all cases where the rules become an issue before any court. Amended by Act 2019, No. 315,§ 2400, eff. 7/24/2019. Acts 1907, No. 239, § 3, p. 557; C. & M. Dig., § 845; Pope's Dig., § 1049; A.S.A. 1947, § 73-1358.

(a) It shall be lawful for railroads to prescribe rules for the transportation of merchandise, livestock, and other freight that are reasonable and not inconsistent with the common law or statutory duties and liabilities of railroads as common carriers.

(b) The reasonableness or unreasonableness of the rules shall be determined by a jury in all cases where the rules become an issue before any court.

Amended by Act 2019, No. 315,§ 2400, eff. 7/24/2019.

Acts 1907, No. 239, § 3, p. 557; C. & M. Dig., § 845; Pope's Dig., § 1049; A.S.A. 1947, § 73-1358.
Ark. Code Ann. § 23-63-508 — AR Code / Title 23 / Chapter 63 / Subchapter 5 / Section 23-63-508
Control of or merger with domestic insurer - Content of statement
Status: in_force

(a) The statement to be filed with the Insurance Commissioner pursuant to this section shall be made under oath or affirmation and shall contain the following information: (1) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in § 23-63-506 is to be effected, hereinafter called "acquiring party", and: (A) If the person is an individual, his or her principal occupation and all offices and positions held during the past five (5) years and any conviction of crimes other than minor traffic violations during the past ten (10) years; and (B) If the person is not an individual, a report of the nature of its business operations during the past five (5) years or for such lesser period as the person and any predecessors thereof shall have been in existence, an informative description of the business intended to be done by the person and the person's subsidiaries, and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to the positions. The list shall include for each individual the information required by subdivision (a)(1)(A) of this section; (2) The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose, and the identity of persons furnishing the consideration. However, where a source of the consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential if the person filing the statement so requests; (3) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five (5) fiscal years of each acquiring party, or for such lesser period as the acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than ninety (90) days prior to the filing of the statement; (4) Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management; (5) The number of shares of any security referred to in § 23-63-506 which each acquiring party proposes to acquire, the terms of the offer, request, invitation, agreement, or acquisition referred to in § 23-63-506 , and a statement as to the method by which the fairness of the proposal was arrived at; (6) The amount of each class of any security referred to in § 23-63-506 which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party; (7) A full description of any contracts, arrangements, or understandings with respect to any security referred to in § 23-63-506 in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loans or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description shall identify the persons with whom the contracts, arrangements, or understandings have been entered into; (8) A description of the purchase of any security referred to in § 23-63-506 during the twelve (12) calendar months preceding the filing of the statement by any acquiring party, including the dates to purchase, names of the purchasers, and consideration paid or agreed to be paid therefor; (9) A description of any recommendations to purchase any security referred to in § 23-63-506 made during the twelve (12) calendar months preceding the filing of the statement by any acquiring party or by anyone based upon interviews or at the suggestion of the acquiring party; (10) Copies of all tender offers for, requests or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in § 23-63-506 and, if distributed, of additional soliciting material relating thereto; (11) The terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities referred to in § 23-63-506 for tender, and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto; (12) An agreement by the person required to file the statement referred to in § 23-63-506 that it will provide the annual report specified in § 23-63-514(m) for as long as control exists; (13) An acknowledgement by the person required to file the statement referred to in § 23-63-506 that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer; and (14) Such additional information as the commissioner may, by rule or regulation, prescribe as necessary or appropriate for the protection of policyholders and security holders of the insurer or in the public interest. (b) (1) If the person required to file the statement referred to in § 23-63-506 is a partnership, limited partnership, syndicate, or other group, the commissioner may require that the information called for by subdivisions (a)(1)-(14) of this section shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. (2) If any partner, member, or person is a corporation or the person required to file the statement referred to in § 23-63-506 is a corporation, the commissioner may require that the information called for by subdivisions (a)(1)-(14) of this section shall be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than ten percent (10%) of the outstanding voting securities of the corporation. (c) If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to the insurer pursuant to §§ 23-63-506 - 23-63-513 , an amendment setting forth the change, together with copies of all documents and other material relevant to the change, shall be filed with the commissioner and sent to the insurer within two (2) business days after the person learns of the change. The insurer shall send the amendment to its stockholders. Amended by Act 2017, No. 386,§ 2, eff. 8/1/2017. Acts 1971, No. 288, § 5; A.S.A. 1947, § 66-5005; Acts 1991, No. 723, § 22.

(a) The statement to be filed with the Insurance Commissioner pursuant to this section shall be made under oath or affirmation and shall contain the following information: (1) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in § 23-63-506 is to be effected, hereinafter called "acquiring party", and: (A) If the person is an individual, his or her principal occupation and all offices and positions held during the past five (5) years and any conviction of crimes other than minor traffic violations during the past ten (10) years; and (B) If the person is not an individual, a report of the nature of its business operations during the past five (5) years or for such lesser period as the person and any predecessors thereof shall have been in existence, an informative description of the business intended to be done by the person and the person's subsidiaries, and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to the positions. The list shall include for each individual the information required by subdivision (a)(1)(A) of this section; (2) The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose, and the identity of persons furnishing the consideration. However, where a source of the consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential if the person filing the statement so requests; (3) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five (5) fiscal years of each acquiring party, or for such lesser period as the acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than ninety (90) days prior to the filing of the statement; (4) Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management; (5) The number of shares of any security referred to in § 23-63-506 which each acquiring party proposes to acquire, the terms of the offer, request, invitation, agreement, or acquisition referred to in § 23-63-506 , and a statement as to the method by which the fairness of the proposal was arrived at; (6) The amount of each class of any security referred to in § 23-63-506 which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party; (7) A full description of any contracts, arrangements, or understandings with respect to any security referred to in § 23-63-506 in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loans or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description shall identify the persons with whom the contracts, arrangements, or understandings have been entered into; (8) A description of the purchase of any security referred to in § 23-63-506 during the twelve (12) calendar months preceding the filing of the statement by any acquiring party, including the dates to purchase, names of the purchasers, and consideration paid or agreed to be paid therefor; (9) A description of any recommendations to purchase any security referred to in § 23-63-506 made during the twelve (12) calendar months preceding the filing of the statement by any acquiring party or by anyone based upon interviews or at the suggestion of the acquiring party; (10) Copies of all tender offers for, requests or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in § 23-63-506 and, if distributed, of additional soliciting material relating thereto; (11) The terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities referred to in § 23-63-506 for tender, and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto; (12) An agreement by the person required to file the statement referred to in § 23-63-506 that it will provide the annual report specified in § 23-63-514(m) for as long as control exists; (13) An acknowledgement by the person required to file the statement referred to in § 23-63-506 that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer; and (14) Such additional information as the commissioner may, by rule or regulation, prescribe as necessary or appropriate for the protection of policyholders and security holders of the insurer or in the public interest.

(1) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in § 23-63-506 is to be effected, hereinafter called "acquiring party", and: (A) If the person is an individual, his or her principal occupation and all offices and positions held during the past five (5) years and any conviction of crimes other than minor traffic violations during the past ten (10) years; and (B) If the person is not an individual, a report of the nature of its business operations during the past five (5) years or for such lesser period as the person and any predecessors thereof shall have been in existence, an informative description of the business intended to be done by the person and the person's subsidiaries, and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to the positions. The list shall include for each individual the information required by subdivision (a)(1)(A) of this section;

(A) If the person is an individual, his or her principal occupation and all offices and positions held during the past five (5) years and any conviction of crimes other than minor traffic violations during the past ten (10) years; and

(B) If the person is not an individual, a report of the nature of its business operations during the past five (5) years or for such lesser period as the person and any predecessors thereof shall have been in existence, an informative description of the business intended to be done by the person and the person's subsidiaries, and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to the positions. The list shall include for each individual the information required by subdivision (a)(1)(A) of this section;

(2) The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose, and the identity of persons furnishing the consideration. However, where a source of the consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential if the person filing the statement so requests;

(3) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five (5) fiscal years of each acquiring party, or for such lesser period as the acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than ninety (90) days prior to the filing of the statement;

(4) Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management;

(5) The number of shares of any security referred to in § 23-63-506 which each acquiring party proposes to acquire, the terms of the offer, request, invitation, agreement, or acquisition referred to in § 23-63-506 , and a statement as to the method by which the fairness of the proposal was arrived at;

(6) The amount of each class of any security referred to in § 23-63-506 which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;

(7) A full description of any contracts, arrangements, or understandings with respect to any security referred to in § 23-63-506 in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loans or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description shall identify the persons with whom the contracts, arrangements, or understandings have been entered into;

(8) A description of the purchase of any security referred to in § 23-63-506 during the twelve (12) calendar months preceding the filing of the statement by any acquiring party, including the dates to purchase, names of the purchasers, and consideration paid or agreed to be paid therefor;

(9) A description of any recommendations to purchase any security referred to in § 23-63-506 made during the twelve (12) calendar months preceding the filing of the statement by any acquiring party or by anyone based upon interviews or at the suggestion of the acquiring party;

(10) Copies of all tender offers for, requests or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in § 23-63-506 and, if distributed, of additional soliciting material relating thereto;

(11) The terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities referred to in § 23-63-506 for tender, and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto;

(12) An agreement by the person required to file the statement referred to in § 23-63-506 that it will provide the annual report specified in § 23-63-514(m) for as long as control exists;

(13) An acknowledgement by the person required to file the statement referred to in § 23-63-506 that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer; and

(14) Such additional information as the commissioner may, by rule or regulation, prescribe as necessary or appropriate for the protection of policyholders and security holders of the insurer or in the public interest.

(b) (1) If the person required to file the statement referred to in § 23-63-506 is a partnership, limited partnership, syndicate, or other group, the commissioner may require that the information called for by subdivisions (a)(1)-(14) of this section shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. (2) If any partner, member, or person is a corporation or the person required to file the statement referred to in § 23-63-506 is a corporation, the commissioner may require that the information called for by subdivisions (a)(1)-(14) of this section shall be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than ten percent (10%) of the outstanding voting securities of the corporation.

(1) If the person required to file the statement referred to in § 23-63-506 is a partnership, limited partnership, syndicate, or other group, the commissioner may require that the information called for by subdivisions (a)(1)-(14) of this section shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member.

(2) If any partner, member, or person is a corporation or the person required to file the statement referred to in § 23-63-506 is a corporation, the commissioner may require that the information called for by subdivisions (a)(1)-(14) of this section shall be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than ten percent (10%) of the outstanding voting securities of the corporation.

(c) If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to the insurer pursuant to §§ 23-63-506 - 23-63-513 , an amendment setting forth the change, together with copies of all documents and other material relevant to the change, shall be filed with the commissioner and sent to the insurer within two (2) business days after the person learns of the change. The insurer shall send the amendment to its stockholders.

Amended by Act 2017, No. 386,§ 2, eff. 8/1/2017.

Acts 1971, No. 288, § 5; A.S.A. 1947, § 66-5005; Acts 1991, No. 723, § 22.
Ark. Code Ann. § 23-89-215 — AR Code / Title 23 / Chapter 89 / Subchapter 2 / Section 23-89-215
Priority of primary motor vehicle liability insurance coverage
Status: in_force

The liability insurance policy covering a motor vehicle is primary when the motor vehicle is driven by: (1) An insured; or (2) Any other person: (A) Not excluded from coverage under the policy; (B) With the permission of an insured; and (C) When the use of the motor vehicle is within the scope of the permission granted by an insured. Acts 2007, No. 373, § 1.

The liability insurance policy covering a motor vehicle is primary when the motor vehicle is driven by:

(1) An insured; or

(2) Any other person: (A) Not excluded from coverage under the policy; (B) With the permission of an insured; and (C) When the use of the motor vehicle is within the scope of the permission granted by an insured.

(A) Not excluded from coverage under the policy;

(B) With the permission of an insured; and

(C) When the use of the motor vehicle is within the scope of the permission granted by an insured.

Acts 2007, No. 373, § 1.
Ark. Code Ann. § 23-18-316 — AR Code / Title 23 / Chapter 18 / Subchapter 3 / Section 23-18-316
Organizational meeting - Notice
Status: in_force

(a) After the issuance of the certificate of incorporation, an organizational meeting shall be held at the call of a majority of the incorporators for the purpose of adopting bylaws and electing officers and for the transaction of such other business as properly may come before the meeting. (b) The incorporators calling the meeting shall give at least three (3) days' notice thereof by mail to each incorporator. This notice shall state the time and place of the meeting, but notice may be waived in writing. Acts 1937, No. 342, § 10; Pope's Dig., § 2324; A.S.A. 1947, § 77-1110.

(a) After the issuance of the certificate of incorporation, an organizational meeting shall be held at the call of a majority of the incorporators for the purpose of adopting bylaws and electing officers and for the transaction of such other business as properly may come before the meeting.

(b) The incorporators calling the meeting shall give at least three (3) days' notice thereof by mail to each incorporator. This notice shall state the time and place of the meeting, but notice may be waived in writing.

Acts 1937, No. 342, § 10; Pope's Dig., § 2324; A.S.A. 1947, § 77-1110.
Ark. Code Ann. § 23-84-105 — AR Code / Title 23 / Chapter 84 / Section 23-84-105
Minimum standard for valuation - Interest rates - Definitions
Status: in_force

(a) Applicability of this Section. The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates as defined in this chapter: (1) All life insurance policies issued in a particular calendar year, on or after the operative date of § 23-81-213(d) ; (2) All individual annuity and pure endowment contracts issued in a particular calendar year on or after the operative date of § 23-81-213(e) ; (3) All annuities and pure endowments purchased in a particular calendar year on or after the operative date of § 23-81-213(e) , under group annuity and pure endowment contracts; and (4) The net increase, if any, in a particular calendar year after the operative date of § 23-81-213(e) , in amounts held under guaranteed interest contracts. (b) Calendar Year Statutory Valuation Interest Rates. (1) The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer one-quarter of one percent (0.25%): (A) For life insurance: Click here to view formula. (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options: Click here to view formula. where R 1 is the lesser of R and .09, R 2 is the greater of R and .09, R is the reference interest rate defined in subsection (d) of this section, and W is the weighting factor defined in subsection (c) of this section; (C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options valued on an issue year basis, except as stated in subdivision (b)(1)(B) of this section, the formula for life insurance stated in subdivision (b)(1)(A) of this section shall apply to annuities and guaranteed interest contracts with guaranteed durations in excess of ten (10) years. The formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply to annuities and guaranteed interest contracts with guaranteed duration of ten (10) years or less; (D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply; and (E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply. (2) (A) However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this subdivision (b)(2)(A) differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent (0.5%), the calendar year statutory valuation interest rate for such life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. (B) For purposes of applying subdivision (b)(2)(A) of this section, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 by using the reference interest rate defined for 1979 and shall be determined for each subsequent calendar year regardless of the operative date of § 23-81-213(d) . (c) Weighting Factors. (1) The weighting factors referred to in the formulas stated in subsection (b) of this section are given in the following tables: (A) Weighting Factors for Life Insurance: Guarantee Duration (Years) Weighting Factors 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35 For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy; (B) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: .80 (C) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subdivision (c)(1)(B) of this section, shall be as specified in tables (i), (ii), and (iii) of this subdivision (c)(1)(C), according to the rules and definitions in tables (iv) and (v) of this subdivision (c)(1)(C): (i) For annuities and guaranteed interest contracts valued on an issue-year basis: Guarantee Duration (Years) Weighting Factor for Plan Type A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35 (ii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in table (i) of this subdivision (c)(1)(C) increased by: Plan Type A .15 B .25 C .05 (iii) For annuities and guaranteed interest contracts valued on an issue-year basis, other than those with no cash settlement options which do not guarantee interest on considerations received more than one (1) year after issue or purchase and for annuities and guaranteed interest contracts valued on a change-in-fund basis which do not guarantee interest rates on considerations received more than twelve (12) months beyond the valuation date, the factors shown in table (i) of this subdivision (c)(1)(C) or derived in table (ii) of this subdivision (c)(1)(C) increased by: Plan Type A .05 B .05 C .05 (iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guaranteed duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of twenty (20) years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence; (v) Plan type as used in the tables in this subdivision (c)(1)(C) is defined as follows: Plan Type A: At any time, a policyholder may withdraw funds only: (a) With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; (c) As an immediate life annuity; or (d) No withdrawal permitted; Plan Type B: Before expiration of the interest rate guarantee, a policyholder may withdraw funds only: (a) With adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; or (c) No withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such an adjustment in a single sum or installments over less than five (5) years; and Plan Type C: A policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either: (a) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (b) Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund. (2) (A) (i) An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue-year basis or on a change-in-fund basis. (ii) Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue-year basis. (B) As used in this chapter: (i) "Issue-year basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract; and (ii) "Change-in-fund basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund. (d) Reference Interest Rate. The reference interest rate referred to in subsection (b) of this section shall be defined as follows: (1) For all life insurance, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending June 30 of the calendar year next preceding the year of issue, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; (2) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or year of purchase of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; (3) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year-of-issue basis, except as stated in subdivision (d)(2) of this section, with guarantee duration in excess of ten (10) years, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; (4) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year-of-issue basis, except as stated in subdivision (d)(2) of this section, with guarantee duration of ten (10) years or less, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; (5) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; and (6) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change-in-fund basis, except as stated in subdivision (d)(2) of this section, the average over a period of twelve (12) months, ending on June 30 of the calendar year of the change in the fund, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by the Moody's Investors Service, Inc. (e) Alternative Method for Determining Reference Interest Rates. In the event that the Monthly Average of the Composite Yield on Seasoned Corporate Bonds is no longer published by Moody's Investors Service, Inc., or in the event that the National Association of Insurance Commissioners determines that the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate which is adopted by the National Association of Insurance Commissioners and approved by rules promulgated by the Insurance Commissioner may be substituted. Amended by Act 2019, No. 315,§ 2736, eff. 7/24/2019. Acts 1959, No. 148, § 92; 1981, No. 535, § 1; A.S.A. 1947, § 66-2511; Acts 1995, No. 624, § 1.

(a) Applicability of this Section. The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates as defined in this chapter: (1) All life insurance policies issued in a particular calendar year, on or after the operative date of § 23-81-213(d) ; (2) All individual annuity and pure endowment contracts issued in a particular calendar year on or after the operative date of § 23-81-213(e) ; (3) All annuities and pure endowments purchased in a particular calendar year on or after the operative date of § 23-81-213(e) , under group annuity and pure endowment contracts; and (4) The net increase, if any, in a particular calendar year after the operative date of § 23-81-213(e) , in amounts held under guaranteed interest contracts.

(1) All life insurance policies issued in a particular calendar year, on or after the operative date of § 23-81-213(d) ;

(2) All individual annuity and pure endowment contracts issued in a particular calendar year on or after the operative date of § 23-81-213(e) ;

(3) All annuities and pure endowments purchased in a particular calendar year on or after the operative date of § 23-81-213(e) , under group annuity and pure endowment contracts; and

(4) The net increase, if any, in a particular calendar year after the operative date of § 23-81-213(e) , in amounts held under guaranteed interest contracts.

(b) Calendar Year Statutory Valuation Interest Rates. (1) The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer one-quarter of one percent (0.25%): (A) For life insurance: Click here to view formula. (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options: Click here to view formula. where R 1 is the lesser of R and .09, R 2 is the greater of R and .09, R is the reference interest rate defined in subsection (d) of this section, and W is the weighting factor defined in subsection (c) of this section; (C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options valued on an issue year basis, except as stated in subdivision (b)(1)(B) of this section, the formula for life insurance stated in subdivision (b)(1)(A) of this section shall apply to annuities and guaranteed interest contracts with guaranteed durations in excess of ten (10) years. The formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply to annuities and guaranteed interest contracts with guaranteed duration of ten (10) years or less; (D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply; and (E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply. (2) (A) However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this subdivision (b)(2)(A) differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent (0.5%), the calendar year statutory valuation interest rate for such life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. (B) For purposes of applying subdivision (b)(2)(A) of this section, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 by using the reference interest rate defined for 1979 and shall be determined for each subsequent calendar year regardless of the operative date of § 23-81-213(d) .

(1) The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer one-quarter of one percent (0.25%): (A) For life insurance: Click here to view formula. (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options: Click here to view formula. where R 1 is the lesser of R and .09, R 2 is the greater of R and .09, R is the reference interest rate defined in subsection (d) of this section, and W is the weighting factor defined in subsection (c) of this section; (C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options valued on an issue year basis, except as stated in subdivision (b)(1)(B) of this section, the formula for life insurance stated in subdivision (b)(1)(A) of this section shall apply to annuities and guaranteed interest contracts with guaranteed durations in excess of ten (10) years. The formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply to annuities and guaranteed interest contracts with guaranteed duration of ten (10) years or less; (D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply; and (E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply.

(A) For life insurance: Click here to view formula.

Click here to view formula.

(B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options: Click here to view formula. where R 1 is the lesser of R and .09, R 2 is the greater of R and .09, R is the reference interest rate defined in subsection (d) of this section, and W is the weighting factor defined in subsection (c) of this section;

Click here to view formula.

where R 1 is the lesser of R and .09, R 2 is the greater of R and .09, R is the reference interest rate defined in subsection (d) of this section, and W is the weighting factor defined in subsection (c) of this section;

(C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options valued on an issue year basis, except as stated in subdivision (b)(1)(B) of this section, the formula for life insurance stated in subdivision (b)(1)(A) of this section shall apply to annuities and guaranteed interest contracts with guaranteed durations in excess of ten (10) years. The formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply to annuities and guaranteed interest contracts with guaranteed duration of ten (10) years or less;

(D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply; and

(E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision (b)(1)(B) of this section shall apply.

(2) (A) However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this subdivision (b)(2)(A) differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent (0.5%), the calendar year statutory valuation interest rate for such life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. (B) For purposes of applying subdivision (b)(2)(A) of this section, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 by using the reference interest rate defined for 1979 and shall be determined for each subsequent calendar year regardless of the operative date of § 23-81-213(d) .

(A) However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this subdivision (b)(2)(A) differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent (0.5%), the calendar year statutory valuation interest rate for such life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year.

(B) For purposes of applying subdivision (b)(2)(A) of this section, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 by using the reference interest rate defined for 1979 and shall be determined for each subsequent calendar year regardless of the operative date of § 23-81-213(d) .

(c) Weighting Factors. (1) The weighting factors referred to in the formulas stated in subsection (b) of this section are given in the following tables: (A) Weighting Factors for Life Insurance: Guarantee Duration (Years) Weighting Factors 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35 For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy; (B) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: .80 (C) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subdivision (c)(1)(B) of this section, shall be as specified in tables (i), (ii), and (iii) of this subdivision (c)(1)(C), according to the rules and definitions in tables (iv) and (v) of this subdivision (c)(1)(C): (i) For annuities and guaranteed interest contracts valued on an issue-year basis: Guarantee Duration (Years) Weighting Factor for Plan Type A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35 (ii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in table (i) of this subdivision (c)(1)(C) increased by: Plan Type A .15 B .25 C .05 (iii) For annuities and guaranteed interest contracts valued on an issue-year basis, other than those with no cash settlement options which do not guarantee interest on considerations received more than one (1) year after issue or purchase and for annuities and guaranteed interest contracts valued on a change-in-fund basis which do not guarantee interest rates on considerations received more than twelve (12) months beyond the valuation date, the factors shown in table (i) of this subdivision (c)(1)(C) or derived in table (ii) of this subdivision (c)(1)(C) increased by: Plan Type A .05 B .05 C .05 (iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guaranteed duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of twenty (20) years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence; (v) Plan type as used in the tables in this subdivision (c)(1)(C) is defined as follows: Plan Type A: At any time, a policyholder may withdraw funds only: (a) With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; (c) As an immediate life annuity; or (d) No withdrawal permitted; Plan Type B: Before expiration of the interest rate guarantee, a policyholder may withdraw funds only: (a) With adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; or (c) No withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such an adjustment in a single sum or installments over less than five (5) years; and Plan Type C: A policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either: (a) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (b) Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund. (2) (A) (i) An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue-year basis or on a change-in-fund basis. (ii) Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue-year basis. (B) As used in this chapter: (i) "Issue-year basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract; and (ii) "Change-in-fund basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.

(1) The weighting factors referred to in the formulas stated in subsection (b) of this section are given in the following tables: (A) Weighting Factors for Life Insurance: Guarantee Duration (Years) Weighting Factors 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35 For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy; (B) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: .80 (C) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subdivision (c)(1)(B) of this section, shall be as specified in tables (i), (ii), and (iii) of this subdivision (c)(1)(C), according to the rules and definitions in tables (iv) and (v) of this subdivision (c)(1)(C): (i) For annuities and guaranteed interest contracts valued on an issue-year basis: Guarantee Duration (Years) Weighting Factor for Plan Type A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35 (ii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in table (i) of this subdivision (c)(1)(C) increased by: Plan Type A .15 B .25 C .05 (iii) For annuities and guaranteed interest contracts valued on an issue-year basis, other than those with no cash settlement options which do not guarantee interest on considerations received more than one (1) year after issue or purchase and for annuities and guaranteed interest contracts valued on a change-in-fund basis which do not guarantee interest rates on considerations received more than twelve (12) months beyond the valuation date, the factors shown in table (i) of this subdivision (c)(1)(C) or derived in table (ii) of this subdivision (c)(1)(C) increased by: Plan Type A .05 B .05 C .05 (iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guaranteed duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of twenty (20) years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence; (v) Plan type as used in the tables in this subdivision (c)(1)(C) is defined as follows: Plan Type A: At any time, a policyholder may withdraw funds only: (a) With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; (c) As an immediate life annuity; or (d) No withdrawal permitted; Plan Type B: Before expiration of the interest rate guarantee, a policyholder may withdraw funds only: (a) With adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; or (c) No withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such an adjustment in a single sum or installments over less than five (5) years; and Plan Type C: A policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either: (a) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (b) Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.

(A) Weighting Factors for Life Insurance: Guarantee Duration (Years) Weighting Factors 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35 For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy;

Guarantee Duration (Years) Weighting Factors 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35

Guarantee Duration (Years)

Weighting Factors

10 or less

.50

More than 10, but not more than 20

.45

More than 20

.35

For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy;

(B) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: .80

.80

(C) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subdivision (c)(1)(B) of this section, shall be as specified in tables (i), (ii), and (iii) of this subdivision (c)(1)(C), according to the rules and definitions in tables (iv) and (v) of this subdivision (c)(1)(C): (i) For annuities and guaranteed interest contracts valued on an issue-year basis: Guarantee Duration (Years) Weighting Factor for Plan Type A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35 (ii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in table (i) of this subdivision (c)(1)(C) increased by: Plan Type A .15 B .25 C .05 (iii) For annuities and guaranteed interest contracts valued on an issue-year basis, other than those with no cash settlement options which do not guarantee interest on considerations received more than one (1) year after issue or purchase and for annuities and guaranteed interest contracts valued on a change-in-fund basis which do not guarantee interest rates on considerations received more than twelve (12) months beyond the valuation date, the factors shown in table (i) of this subdivision (c)(1)(C) or derived in table (ii) of this subdivision (c)(1)(C) increased by: Plan Type A .05 B .05 C .05 (iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guaranteed duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of twenty (20) years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence; (v) Plan type as used in the tables in this subdivision (c)(1)(C) is defined as follows: Plan Type A: At any time, a policyholder may withdraw funds only: (a) With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; (c) As an immediate life annuity; or (d) No withdrawal permitted; Plan Type B: Before expiration of the interest rate guarantee, a policyholder may withdraw funds only: (a) With adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; or (c) No withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such an adjustment in a single sum or installments over less than five (5) years; and Plan Type C: A policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either: (a) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (b) Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.

(i) For annuities and guaranteed interest contracts valued on an issue-year basis: Guarantee Duration (Years) Weighting Factor for Plan Type A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35

Guarantee Duration (Years) Weighting Factor for Plan Type A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35

Guarantee Duration (Years)

Weighting Factor for Plan Type

A

B

C

5 or less:

.80

.60

.50

More than 5, but not more than 10:

.75

.60

.50

More than 10, but not more than 20:

.65

.50

.45

More than 20:

.45

.35

(ii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in table (i) of this subdivision (c)(1)(C) increased by: Plan Type A .15 B .25 C .05

Plan Type A .15 B .25 C .05

Plan Type

A .15

B .25

C .05

(iii) For annuities and guaranteed interest contracts valued on an issue-year basis, other than those with no cash settlement options which do not guarantee interest on considerations received more than one (1) year after issue or purchase and for annuities and guaranteed interest contracts valued on a change-in-fund basis which do not guarantee interest rates on considerations received more than twelve (12) months beyond the valuation date, the factors shown in table (i) of this subdivision (c)(1)(C) or derived in table (ii) of this subdivision (c)(1)(C) increased by: Plan Type A .05 B .05 C .05

Plan Type A .05 B .05 C .05

Plan Type

A .05

B .05

C .05

(iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guaranteed duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of twenty (20) years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence;

(v) Plan type as used in the tables in this subdivision (c)(1)(C) is defined as follows: Plan Type A: At any time, a policyholder may withdraw funds only: (a) With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; (c) As an immediate life annuity; or (d) No withdrawal permitted; Plan Type B: Before expiration of the interest rate guarantee, a policyholder may withdraw funds only: (a) With adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; or (c) No withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such an adjustment in a single sum or installments over less than five (5) years; and Plan Type C: A policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either: (a) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (b) Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.

Plan Type A: At any time, a policyholder may withdraw funds only:

(a) With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer;

(b) Without such an adjustment but in installments over five (5) years or more;

(c) As an immediate life annuity; or

(d) No withdrawal permitted; Plan Type B: Before expiration of the interest rate guarantee, a policyholder may withdraw funds only: (a) With adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; (b) Without such an adjustment but in installments over five (5) years or more; or (c) No withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such an adjustment in a single sum or installments over less than five (5) years; and Plan Type C: A policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either: (a) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (b) Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.

Plan Type B: Before expiration of the interest rate guarantee, a policyholder may withdraw funds only:

(a) With adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer;

(b) Without such an adjustment but in installments over five (5) years or more; or

(c) No withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such an adjustment in a single sum or installments over less than five (5) years; and Plan Type C: A policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either: (a) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (b) Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.

Plan Type C: A policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either:

(a) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or

(b) Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.

(2) (A) (i) An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue-year basis or on a change-in-fund basis. (ii) Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue-year basis. (B) As used in this chapter: (i) "Issue-year basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract; and (ii) "Change-in-fund basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.

(A) (i) An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue-year basis or on a change-in-fund basis. (ii) Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue-year basis.

(i) An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue-year basis or on a change-in-fund basis.

(ii) Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue-year basis.

(B) As used in this chapter: (i) "Issue-year basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract; and (ii) "Change-in-fund basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.

(i) "Issue-year basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract; and

(ii) "Change-in-fund basis of valuation" means a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.

(d) Reference Interest Rate. The reference interest rate referred to in subsection (b) of this section shall be defined as follows: (1) For all life insurance, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending June 30 of the calendar year next preceding the year of issue, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; (2) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or year of purchase of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; (3) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year-of-issue basis, except as stated in subdivision (d)(2) of this section, with guarantee duration in excess of ten (10) years, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; (4) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year-of-issue basis, except as stated in subdivision (d)(2) of this section, with guarantee duration of ten (10) years or less, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; (5) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; and (6) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change-in-fund basis, except as stated in subdivision (d)(2) of this section, the average over a period of twelve (12) months, ending on June 30 of the calendar year of the change in the fund, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by the Moody's Investors Service, Inc.

(1) For all life insurance, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending June 30 of the calendar year next preceding the year of issue, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.;

(2) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or year of purchase of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.;

(3) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year-of-issue basis, except as stated in subdivision (d)(2) of this section, with guarantee duration in excess of ten (10) years, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.;

(4) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year-of-issue basis, except as stated in subdivision (d)(2) of this section, with guarantee duration of ten (10) years or less, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.;

(5) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc.; and

(6) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change-in-fund basis, except as stated in subdivision (d)(2) of this section, the average over a period of twelve (12) months, ending on June 30 of the calendar year of the change in the fund, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by the Moody's Investors Service, Inc.

(e) Alternative Method for Determining Reference Interest Rates. In the event that the Monthly Average of the Composite Yield on Seasoned Corporate Bonds is no longer published by Moody's Investors Service, Inc., or in the event that the National Association of Insurance Commissioners determines that the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate which is adopted by the National Association of Insurance Commissioners and approved by rules promulgated by the Insurance Commissioner may be substituted.

Amended by Act 2019, No. 315,§ 2736, eff. 7/24/2019.

Acts 1959, No. 148, § 92; 1981, No. 535, § 1; A.S.A. 1947, § 66-2511; Acts 1995, No. 624, § 1.

84_105_1 - Attachment

84_105_2 - Attachment
Ark. Code Ann. § 23-110-405 — AR Code / Title 23 / Chapter 110 / Subchapter 4 / Section 23-110-405
Wagering - Penalty for improper wagering
Status: in_force

(a) (1) Any franchise holder conducting a horse racing meet may provide a place or places in the race meeting grounds or enclosure at which it may conduct and supervise the pari-mutuel or certificate system of wagering. (2) If conducted under the provisions of this chapter, the pari-mutuel or certificate method of wagering shall not under any circumstances be held or construed to be unlawful, all other laws or parts of laws of the State of Arkansas to the contrary notwithstanding. (b) (1) With the prior approval of the Arkansas Racing Commission and consistent with applicable federal law, a franchise holder may enter into agreements and arrangements with other parties pursuant to which: (A) Its patrons may wager on races run at other race tracks that are shown live or in any other manner approved by the commission, by television, or otherwise, at locations on the grounds at the Arkansas race track at any time or times during the calendar year; and (B) Its races are shown live or in any other manner approved by the commission at other race tracks and locations. (2) Such agreements and arrangements shall specify all financial, wagering, distribution, and other details that shall govern. To that end, the provisions of §§ 23-110-402 and 23-110-407 and any other inconsistent provisions shall not be applicable to such agreements and arrangements. (3) (A) For all races simulcast to the grounds of the franchise holder's Arkansas race track from other race tracks and races conducted in the past and rebroadcast by electronic means and shown on a delayed or replayed basis on the grounds of the franchise holder's Arkansas race track under subdivision (b)(1) of this section, the franchise holder shall withhold and pay to the commission as a privilege tax for the use and benefit of the State of Arkansas one percent (1%) of all moneys wagered on the races on the grounds of the franchise holder's Arkansas race track. (B) The difference between the two percent (2%) rate being withheld and so paid by the franchise holder to the State of Arkansas on wagers on the races described in subdivision (b)(3)(A) of this section under rules of the commission in effect prior to the enactment of this subdivision (b)(3) and the one percent (1%) rate established in subdivision (b)(3)(A) of this section shall be withheld by the franchise holder from wagers on such races and set aside by the franchise holder in a separate account to be used only for purses and construction, for debt service on money borrowed by the franchise holder for construction, or for promotions to encourage patronage and tourism, in accordance with the provisions of § 23-110-407(a)(3) . (c) No franchise holder shall permit any person under eighteen (18) years of age to be a patron of the pari-mutuel or certificate system of wagering conducted or supervised by it. (d) (1) (A) However, nothing contained in this section shall be construed to permit the pari-mutuel or certificate method of wagering upon any race track unless the track is licensed as provided by this chapter. (B) It is declared to be unlawful for any franchise holder to permit, conduct, or supervise upon any race track any pari-mutuel or certificate method of wagering except in accordance with the provisions of this chapter. (2) (A) There shall be no wagering on the results of any races except under the pari-mutuel or certificate method of wagering as provided for in this section, and then only by the installation and use of equipment approved by the commission. (B) Any franchise holder using or permitting wagering or any person wagering under any other method at a licensed race track shall be guilty of a Class D felony. (e) (1) With the prior approval of the commission and pursuant to rules adopted by the commission, a franchise holder's patrons with money on deposit in an account with the franchise holder may place wagers by communication through telephone or other mobile device or through other electronic means on races conducted at the franchise holder's race track facility and horse races or greyhound races at other racetracks, whether or not the patron is located on the grounds of the franchise holder's race track facility when placing the wager. (2) Wagers accepted by the franchise holder under this subsection shall be treated for all purposes under this chapter as a wager made by the patron on the grounds of the franchise holder's race track facility. Amended by Act 2019, No. 315,§ 2815, eff. 7/24/2019. Amended by Act 2013, No. 350,§ 5, eff. 3/14/2013. Acts 1957, No. 46, § 22; A.S.A. 1947, § 84-2748; Acts 1987, No. 440, § 3; 1989, No. 12, § 2; 1999, No. 10, § 1; 2001, No. 1294, § 2; 2005, No. 1994, § 485.

(a) (1) Any franchise holder conducting a horse racing meet may provide a place or places in the race meeting grounds or enclosure at which it may conduct and supervise the pari-mutuel or certificate system of wagering. (2) If conducted under the provisions of this chapter, the pari-mutuel or certificate method of wagering shall not under any circumstances be held or construed to be unlawful, all other laws or parts of laws of the State of Arkansas to the contrary notwithstanding.

(1) Any franchise holder conducting a horse racing meet may provide a place or places in the race meeting grounds or enclosure at which it may conduct and supervise the pari-mutuel or certificate system of wagering.

(2) If conducted under the provisions of this chapter, the pari-mutuel or certificate method of wagering shall not under any circumstances be held or construed to be unlawful, all other laws or parts of laws of the State of Arkansas to the contrary notwithstanding.

(b) (1) With the prior approval of the Arkansas Racing Commission and consistent with applicable federal law, a franchise holder may enter into agreements and arrangements with other parties pursuant to which: (A) Its patrons may wager on races run at other race tracks that are shown live or in any other manner approved by the commission, by television, or otherwise, at locations on the grounds at the Arkansas race track at any time or times during the calendar year; and (B) Its races are shown live or in any other manner approved by the commission at other race tracks and locations. (2) Such agreements and arrangements shall specify all financial, wagering, distribution, and other details that shall govern. To that end, the provisions of §§ 23-110-402 and 23-110-407 and any other inconsistent provisions shall not be applicable to such agreements and arrangements. (3) (A) For all races simulcast to the grounds of the franchise holder's Arkansas race track from other race tracks and races conducted in the past and rebroadcast by electronic means and shown on a delayed or replayed basis on the grounds of the franchise holder's Arkansas race track under subdivision (b)(1) of this section, the franchise holder shall withhold and pay to the commission as a privilege tax for the use and benefit of the State of Arkansas one percent (1%) of all moneys wagered on the races on the grounds of the franchise holder's Arkansas race track. (B) The difference between the two percent (2%) rate being withheld and so paid by the franchise holder to the State of Arkansas on wagers on the races described in subdivision (b)(3)(A) of this section under rules of the commission in effect prior to the enactment of this subdivision (b)(3) and the one percent (1%) rate established in subdivision (b)(3)(A) of this section shall be withheld by the franchise holder from wagers on such races and set aside by the franchise holder in a separate account to be used only for purses and construction, for debt service on money borrowed by the franchise holder for construction, or for promotions to encourage patronage and tourism, in accordance with the provisions of § 23-110-407(a)(3) .

(1) With the prior approval of the Arkansas Racing Commission and consistent with applicable federal law, a franchise holder may enter into agreements and arrangements with other parties pursuant to which: (A) Its patrons may wager on races run at other race tracks that are shown live or in any other manner approved by the commission, by television, or otherwise, at locations on the grounds at the Arkansas race track at any time or times during the calendar year; and (B) Its races are shown live or in any other manner approved by the commission at other race tracks and locations.

(A) Its patrons may wager on races run at other race tracks that are shown live or in any other manner approved by the commission, by television, or otherwise, at locations on the grounds at the Arkansas race track at any time or times during the calendar year; and

(B) Its races are shown live or in any other manner approved by the commission at other race tracks and locations.

(2) Such agreements and arrangements shall specify all financial, wagering, distribution, and other details that shall govern. To that end, the provisions of §§ 23-110-402 and 23-110-407 and any other inconsistent provisions shall not be applicable to such agreements and arrangements.

(3) (A) For all races simulcast to the grounds of the franchise holder's Arkansas race track from other race tracks and races conducted in the past and rebroadcast by electronic means and shown on a delayed or replayed basis on the grounds of the franchise holder's Arkansas race track under subdivision (b)(1) of this section, the franchise holder shall withhold and pay to the commission as a privilege tax for the use and benefit of the State of Arkansas one percent (1%) of all moneys wagered on the races on the grounds of the franchise holder's Arkansas race track. (B) The difference between the two percent (2%) rate being withheld and so paid by the franchise holder to the State of Arkansas on wagers on the races described in subdivision (b)(3)(A) of this section under rules of the commission in effect prior to the enactment of this subdivision (b)(3) and the one percent (1%) rate established in subdivision (b)(3)(A) of this section shall be withheld by the franchise holder from wagers on such races and set aside by the franchise holder in a separate account to be used only for purses and construction, for debt service on money borrowed by the franchise holder for construction, or for promotions to encourage patronage and tourism, in accordance with the provisions of § 23-110-407(a)(3) .

(A) For all races simulcast to the grounds of the franchise holder's Arkansas race track from other race tracks and races conducted in the past and rebroadcast by electronic means and shown on a delayed or replayed basis on the grounds of the franchise holder's Arkansas race track under subdivision (b)(1) of this section, the franchise holder shall withhold and pay to the commission as a privilege tax for the use and benefit of the State of Arkansas one percent (1%) of all moneys wagered on the races on the grounds of the franchise holder's Arkansas race track.

(B) The difference between the two percent (2%) rate being withheld and so paid by the franchise holder to the State of Arkansas on wagers on the races described in subdivision (b)(3)(A) of this section under rules of the commission in effect prior to the enactment of this subdivision (b)(3) and the one percent (1%) rate established in subdivision (b)(3)(A) of this section shall be withheld by the franchise holder from wagers on such races and set aside by the franchise holder in a separate account to be used only for purses and construction, for debt service on money borrowed by the franchise holder for construction, or for promotions to encourage patronage and tourism, in accordance with the provisions of § 23-110-407(a)(3) .

(c) No franchise holder shall permit any person under eighteen (18) years of age to be a patron of the pari-mutuel or certificate system of wagering conducted or supervised by it.

(d) (1) (A) However, nothing contained in this section shall be construed to permit the pari-mutuel or certificate method of wagering upon any race track unless the track is licensed as provided by this chapter. (B) It is declared to be unlawful for any franchise holder to permit, conduct, or supervise upon any race track any pari-mutuel or certificate method of wagering except in accordance with the provisions of this chapter. (2) (A) There shall be no wagering on the results of any races except under the pari-mutuel or certificate method of wagering as provided for in this section, and then only by the installation and use of equipment approved by the commission. (B) Any franchise holder using or permitting wagering or any person wagering under any other method at a licensed race track shall be guilty of a Class D felony.

(1) (A) However, nothing contained in this section shall be construed to permit the pari-mutuel or certificate method of wagering upon any race track unless the track is licensed as provided by this chapter. (B) It is declared to be unlawful for any franchise holder to permit, conduct, or supervise upon any race track any pari-mutuel or certificate method of wagering except in accordance with the provisions of this chapter.

(A) However, nothing contained in this section shall be construed to permit the pari-mutuel or certificate method of wagering upon any race track unless the track is licensed as provided by this chapter.

(B) It is declared to be unlawful for any franchise holder to permit, conduct, or supervise upon any race track any pari-mutuel or certificate method of wagering except in accordance with the provisions of this chapter.

(2) (A) There shall be no wagering on the results of any races except under the pari-mutuel or certificate method of wagering as provided for in this section, and then only by the installation and use of equipment approved by the commission. (B) Any franchise holder using or permitting wagering or any person wagering under any other method at a licensed race track shall be guilty of a Class D felony.

(A) There shall be no wagering on the results of any races except under the pari-mutuel or certificate method of wagering as provided for in this section, and then only by the installation and use of equipment approved by the commission.

(B) Any franchise holder using or permitting wagering or any person wagering under any other method at a licensed race track shall be guilty of a Class D felony.

(e) (1) With the prior approval of the commission and pursuant to rules adopted by the commission, a franchise holder's patrons with money on deposit in an account with the franchise holder may place wagers by communication through telephone or other mobile device or through other electronic means on races conducted at the franchise holder's race track facility and horse races or greyhound races at other racetracks, whether or not the patron is located on the grounds of the franchise holder's race track facility when placing the wager. (2) Wagers accepted by the franchise holder under this subsection shall be treated for all purposes under this chapter as a wager made by the patron on the grounds of the franchise holder's race track facility.

(1) With the prior approval of the commission and pursuant to rules adopted by the commission, a franchise holder's patrons with money on deposit in an account with the franchise holder may place wagers by communication through telephone or other mobile device or through other electronic means on races conducted at the franchise holder's race track facility and horse races or greyhound races at other racetracks, whether or not the patron is located on the grounds of the franchise holder's race track facility when placing the wager.

(2) Wagers accepted by the franchise holder under this subsection shall be treated for all purposes under this chapter as a wager made by the patron on the grounds of the franchise holder's race track facility.

Amended by Act 2019, No. 315,§ 2815, eff. 7/24/2019.

Amended by Act 2013, No. 350,§ 5, eff. 3/14/2013.

Acts 1957, No. 46, § 22; A.S.A. 1947, § 84-2748; Acts 1987, No. 440, § 3; 1989, No. 12, § 2; 1999, No. 10, § 1; 2001, No. 1294, § 2; 2005, No. 1994, § 485.
Ark. Code Ann. § 23-63-1620 — AR Code / Title 23 / Chapter 63 / Subchapter 16 / Section 23-63-1620
Sponsored captive insurance company - Requirements
Status: in_force

(a) One (1) or more sponsors may form a sponsored captive insurance company under this subchapter. (b) (1) A sponsor of a sponsored captive insurance company may be any person approved by the Insurance Commissioner, in his or her discretion, based on a determination that the approval of the person as a sponsor is consistent with the purposes of this section. (2) In evaluating the qualifications of a proposed sponsor, the commissioner shall consider: (A) The type and structure of the proposed sponsor entity; (B) The experience in financial operations of the proposed sponsor entity; (C) The financial stability and strength of the proposed sponsor entity; (D) The business reputation of the proposed sponsor entity; and (E) Other facts the commissioner deems relevant. (c) In addition to the information required by § 23-63-1602 , each applicant-sponsored captive insurance company shall file with the commissioner the following: (1) Materials demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the commissioner, and how it will report the experience to the commissioner; (2) A statement acknowledging that all financial records of the sponsored captive insurance company, including records pertaining to any protected cells, shall be made available for inspection or examination by the commissioner or his or her designee; (3) All contracts or sample contracts between the sponsored captive insurance company and any participants; and (4) Evidence that expenses shall be allocated to each protected cell in a fair and equitable manner. (d) In his or her discretion, the commissioner may require that the business written by a sponsored captive insurance company, with respect to each protected cell, be: (1) Fronted by an insurance company licensed under the laws of any state; (2) Reinsured by a reinsurer authorized or approved by the commissioner; or (3) (A) Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the commissioner. (B) The commissioner may require the sponsored captive insurance company to increase the funding of any security arrangement established under subdivision (d)(3)(A) of this section. (C) If the form of security is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the commissioner. (D) A trust maintained under subdivision (d)(3)(A) of this section shall be established in a form and upon the terms approved by the commissioner. (e) A risk retention group shall not be either a sponsor or a participant of a sponsored captive insurance company. (f) A sponsored captive insurance company formed or licensed under this subchapter may establish and maintain one (1) or more protected cells to insure risks of one (1) or more participants, subject to the following conditions: (1) The shareholders of a sponsored captive insurance company must be limited to its participants and sponsors; (2) Each protected cell must be accounted for separately on the books and records of the sponsored captive insurance company to reflect the financial condition, results of operations of the protected cell, net income or loss, dividends or other distributions to participants, and other factors provided for in the participant contract or required by the commissioner; (3) The assets of a protected cell must not be chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct; (4) No sale, exchange, or other transfer of assets may be made by the sponsored captive insurance company between or among any of its protected cells without the consent of the protected cells; (5) (A) No sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell to a sponsor or participant without the commissioner's approval. (B) In no event may the commissioner's approval be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell; (6) (A) All attributions of assets and liabilities to the protected cells and the general account shall be according to the plan of operation approved by the commissioner. (B) Other attribution of assets or liabilities shall not be made by a sponsored captive insurance company between its general account and a protected cell or between protected cells. (C) The sponsored captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to the protected cell. (D) The performance under the reinsurance contract and any tax benefits, losses, refunds, or credits allocated under a tax allocation agreement to which the sponsored captive insurance company is a party, including any payments made by or due to be made to the sponsored captive insurance company under the terms of the agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract that are attributed to the protected cell; (7) A sponsored captive insurance company shall file annually all the financial reports the commissioner requires, which shall include without limitation accounting statements detailing the financial experience of each protected cell; (8) A sponsored captive insurance company shall notify the commissioner in writing within ten (10) business days of a protected cell that is insolvent or unable to meet its claim or expense obligations; and (9) (A) No participant contract shall take effect without the commissioner's prior written approval. (B) The addition of each new protected cell and the withdrawal of any participant of any existing protected cell constitute a change in the business plan requiring the commissioner's prior written approval. (g) A protected cell of a sponsored captive insurance company may be formed as an incorporated protected cell subject to subsection (f) of this section and the following conditions: (1) (A) Subject to the prior written approval of the sponsored captive insurance company and of the commissioner, an incorporated protected cell may enter into contracts and undertake obligations in its own name and for its own account. (B) In the case of a contract or obligation to which the sponsored captive insurance company is not a party, either in its own name and for its own account or on behalf of a protected cell, the counterparty to the contract or obligation does not have a right or recourse against the sponsored captive insurance company and its assets other than against assets properly attributable to the incorporated protected cell that is a party to the contract or obligation; (2) (A) The articles of incorporation or articles of organization of an incorporated protected cell shall refer to the sponsored captive insurance company for which it is a protected cell and shall state that the protected cell is incorporated or organized for the limited purposes authorized by the sponsored captive insurance company's license. (B) A copy of the prior written approval of the commissioner to add the incorporated protected cell shall be attached to and filed with the articles of incorporation or the articles of organization; and (3) An incorporated protected cell shall have its own distinct name or designation, which shall include the words "Incorporated Cell" or the acronym "IC". (h) (1) A protected cell of a sponsored captive insurance company may be converted into an incorporated protected cell subject to the following conditions: (A) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cell or as otherwise permitted pursuant to a participation agreement, a sponsored captive insurance company may convert a protected cell into an incorporated protected cell without affecting the protected cell's assets, rights, benefits, obligations, and liabilities; and (B) The conversion shall be deemed: (i) For all purposes to be a continuation of the protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as an incorporated protected cell of the sponsored captive insurance company; and (ii) To occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities. (i) A protected cell of a sponsored captive insurance company may be sold, transferred, or assigned subject to the following conditions: (1) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cell, or as otherwise permitted under a participation agreement, or with the consent of the affected incorporated protected cell, a sponsored captive insurance company may sell, transfer, assign, and otherwise convey a protected cell or incorporated protected cell together with all of the protected cell's assets, rights, benefits, obligations, and liabilities to a new or existing sponsored captive insurance company, under a plan of operation that is approved by the commissioner; (2) The sale, transfer, assignment, or conveyance is a continuation of the protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as a protected cell of the transferee; and (3) The sale, transfer, assignment, or conveyance shall not be construed to limit any rights or protections applicable to the transferred protected cell or incorporated protected cell and the transferor sponsored captive insurance company that existed immediately before the sale, transfer, assignment, or conveyance. (j) A protected cell of a sponsored captive insurance company may be converted to a new entity subject to the following conditions: (1) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant in the affected protected cells or as otherwise permitted under a participation agreement and the consent of each affected incorporated protected cell, a sponsored captive insurance company may convert one (1) or more protected cells or incorporated protected cells into a: (A) Single protected cell or incorporated protected cell; (B) New sponsored captive insurance company; (C) New pure captive insurance company; (D) New risk retention group; (E) New industrial insured captive insurance company; or (F) New association captive insurance company; (2) (A) The conversion shall be subject to this section as well as to a plan of operation approved by the commissioner, without affecting any protected cell's or incorporated protected cell's assets, rights, benefits, obligations, and liabilities. (B) The conversion is a continuation of each protected cell's or incorporated protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as a new protected cell or incorporated protected cell, a licensed sponsored captive insurance company, a pure captive insurance company, a risk retention group, an industrial insured captive insurance company, or an association captive insurance company, as applicable. (C) The conversion shall occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities; and (3) The conversion shall not be construed to limit any rights or protections applicable to any converted protected cell or incorporated protected cell and the sponsored captive insurance company, as applicable, that existed immediately before the date of the conversion. (k) (1) Upon an order of supervision, rehabilitation, or liquidation of a sponsored captive insurance company, the receiver shall manage the assets and liabilities of the sponsored captive insurance company under this subsection. (2) In connection with the conservation, rehabilitation, or liquidation of a sponsored captive insurance company, the assets and liabilities of a protected cell shall at all times be kept separate from, and shall not be commingled with, those of other protected cells and the sponsored captive insurance company. (3) The assets of a protected cell shall not be used to pay any expenses or claims other than those attributable to the protected cell. (4) (A) Unless the sponsor consents and the commissioner has granted prior written approval, the assets of the sponsored captive insurance company's general account shall not be used to pay any expenses or claims attributable solely to a protected cell of the sponsored captive insurance company. (B) If the assets of the sponsored captive insurance company's general account are used to pay expenses or claims attributable solely to a protected cell of the sponsored captive insurance company, the sponsor is not required to contribute additional capital and surplus to the sponsored captive insurance company's general account, notwithstanding the provisions of §§ 23-63-1604 and 23-63-1605 . (5) A sponsored captive insurance company's capital and surplus shall at all times be available to pay any expenses of or claims against the sponsored captive insurance company. (6) In the event of the insolvency of a sponsored captive insurance company in which the commissioner determines that one (1) or more protected cells remain solvent, the commissioner may separate the protected cells from the sponsored captive insurance company and, on application of the sponsor, may allow for the conversion of the protected cells into one (1) or more new or existing sponsored captive insurance companies, or one (1) or more other captive insurance companies, under a plan of operation approved by the commissioner. (l) (1) (A) A creditor of a sponsored captive insurance company shall have recourse against the assets attributable to a protected cell only if it is a creditor of the protected cell. (B) A creditor of a protected cell shall not be entitled to recourse against the assets attributable to another protected cell or to the assets in the sponsored captive insurance company's general account. (2) When a sponsored captive insurance company has an obligation to a creditor arising from a transaction or otherwise imposed with respect to a protected cell, the obligation shall: (A) Extend only to the assets attributable to that protected cell, and the creditor shall be entitled to recourse only against the assets attributable to that protected cell; and (B) Not extend to the assets of another protected cell or to the assets in the sponsored captive insurance company's general account, and the creditor shall not be entitled to recourse against the assets attributable to another protected cell or to the assets of the sponsored captive insurance company's general account. (3) When an obligation of a sponsored captive insurance company relates solely to its general account, a creditor shall have recourse only against the assets in the general account. (4) The establishment of one (1) or more protected cells alone, and without more, shall not constitute or be deemed to be a fraudulent conveyance, an intent by the sponsored captive insurance company to defraud creditors, or the carrying out of business by the sponsored captive insurance company for any other fraudulent purpose. (m) It is the intent of the General Assembly under this section to provide sponsored captive insurance companies with the option to establish one (1) or more protected cells as a separate legal entity. (n) This section does not limit any rights or protections applicable to protected cells that are not established as separate legal entities. Amended by Act 2023, No. 469,§ 6, eff. 8/1/2023. Amended by Act 2021, No. 481,§ 1, eff. 7/28/2021. Amended by Act 2019, No. 521,§ 14, eff. 7/24/2019. Amended by Act 2017, No. 370,§ 9, eff. 8/1/2017. Amended by Act 2017, No. 370,§ 8, eff. 8/1/2017. Acts 2001, No. 1391, § 20.

(a) One (1) or more sponsors may form a sponsored captive insurance company under this subchapter.

(b) (1) A sponsor of a sponsored captive insurance company may be any person approved by the Insurance Commissioner, in his or her discretion, based on a determination that the approval of the person as a sponsor is consistent with the purposes of this section. (2) In evaluating the qualifications of a proposed sponsor, the commissioner shall consider: (A) The type and structure of the proposed sponsor entity; (B) The experience in financial operations of the proposed sponsor entity; (C) The financial stability and strength of the proposed sponsor entity; (D) The business reputation of the proposed sponsor entity; and (E) Other facts the commissioner deems relevant.

(1) A sponsor of a sponsored captive insurance company may be any person approved by the Insurance Commissioner, in his or her discretion, based on a determination that the approval of the person as a sponsor is consistent with the purposes of this section.

(2) In evaluating the qualifications of a proposed sponsor, the commissioner shall consider: (A) The type and structure of the proposed sponsor entity; (B) The experience in financial operations of the proposed sponsor entity; (C) The financial stability and strength of the proposed sponsor entity; (D) The business reputation of the proposed sponsor entity; and (E) Other facts the commissioner deems relevant.

(A) The type and structure of the proposed sponsor entity;

(B) The experience in financial operations of the proposed sponsor entity;

(C) The financial stability and strength of the proposed sponsor entity;

(D) The business reputation of the proposed sponsor entity; and

(E) Other facts the commissioner deems relevant.

(c) In addition to the information required by § 23-63-1602 , each applicant-sponsored captive insurance company shall file with the commissioner the following: (1) Materials demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the commissioner, and how it will report the experience to the commissioner; (2) A statement acknowledging that all financial records of the sponsored captive insurance company, including records pertaining to any protected cells, shall be made available for inspection or examination by the commissioner or his or her designee; (3) All contracts or sample contracts between the sponsored captive insurance company and any participants; and (4) Evidence that expenses shall be allocated to each protected cell in a fair and equitable manner.

(1) Materials demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the commissioner, and how it will report the experience to the commissioner;

(2) A statement acknowledging that all financial records of the sponsored captive insurance company, including records pertaining to any protected cells, shall be made available for inspection or examination by the commissioner or his or her designee;

(3) All contracts or sample contracts between the sponsored captive insurance company and any participants; and

(4) Evidence that expenses shall be allocated to each protected cell in a fair and equitable manner.

(d) In his or her discretion, the commissioner may require that the business written by a sponsored captive insurance company, with respect to each protected cell, be: (1) Fronted by an insurance company licensed under the laws of any state; (2) Reinsured by a reinsurer authorized or approved by the commissioner; or (3) (A) Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the commissioner. (B) The commissioner may require the sponsored captive insurance company to increase the funding of any security arrangement established under subdivision (d)(3)(A) of this section. (C) If the form of security is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the commissioner. (D) A trust maintained under subdivision (d)(3)(A) of this section shall be established in a form and upon the terms approved by the commissioner.

(1) Fronted by an insurance company licensed under the laws of any state;

(2) Reinsured by a reinsurer authorized or approved by the commissioner; or

(3) (A) Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the commissioner. (B) The commissioner may require the sponsored captive insurance company to increase the funding of any security arrangement established under subdivision (d)(3)(A) of this section. (C) If the form of security is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the commissioner. (D) A trust maintained under subdivision (d)(3)(A) of this section shall be established in a form and upon the terms approved by the commissioner.

(A) Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the commissioner.

(B) The commissioner may require the sponsored captive insurance company to increase the funding of any security arrangement established under subdivision (d)(3)(A) of this section.

(C) If the form of security is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the commissioner.

(D) A trust maintained under subdivision (d)(3)(A) of this section shall be established in a form and upon the terms approved by the commissioner.

(e) A risk retention group shall not be either a sponsor or a participant of a sponsored captive insurance company.

(f) A sponsored captive insurance company formed or licensed under this subchapter may establish and maintain one (1) or more protected cells to insure risks of one (1) or more participants, subject to the following conditions: (1) The shareholders of a sponsored captive insurance company must be limited to its participants and sponsors; (2) Each protected cell must be accounted for separately on the books and records of the sponsored captive insurance company to reflect the financial condition, results of operations of the protected cell, net income or loss, dividends or other distributions to participants, and other factors provided for in the participant contract or required by the commissioner; (3) The assets of a protected cell must not be chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct; (4) No sale, exchange, or other transfer of assets may be made by the sponsored captive insurance company between or among any of its protected cells without the consent of the protected cells; (5) (A) No sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell to a sponsor or participant without the commissioner's approval. (B) In no event may the commissioner's approval be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell; (6) (A) All attributions of assets and liabilities to the protected cells and the general account shall be according to the plan of operation approved by the commissioner. (B) Other attribution of assets or liabilities shall not be made by a sponsored captive insurance company between its general account and a protected cell or between protected cells. (C) The sponsored captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to the protected cell. (D) The performance under the reinsurance contract and any tax benefits, losses, refunds, or credits allocated under a tax allocation agreement to which the sponsored captive insurance company is a party, including any payments made by or due to be made to the sponsored captive insurance company under the terms of the agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract that are attributed to the protected cell; (7) A sponsored captive insurance company shall file annually all the financial reports the commissioner requires, which shall include without limitation accounting statements detailing the financial experience of each protected cell; (8) A sponsored captive insurance company shall notify the commissioner in writing within ten (10) business days of a protected cell that is insolvent or unable to meet its claim or expense obligations; and (9) (A) No participant contract shall take effect without the commissioner's prior written approval. (B) The addition of each new protected cell and the withdrawal of any participant of any existing protected cell constitute a change in the business plan requiring the commissioner's prior written approval.

(1) The shareholders of a sponsored captive insurance company must be limited to its participants and sponsors;

(2) Each protected cell must be accounted for separately on the books and records of the sponsored captive insurance company to reflect the financial condition, results of operations of the protected cell, net income or loss, dividends or other distributions to participants, and other factors provided for in the participant contract or required by the commissioner;

(3) The assets of a protected cell must not be chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct;

(4) No sale, exchange, or other transfer of assets may be made by the sponsored captive insurance company between or among any of its protected cells without the consent of the protected cells;

(5) (A) No sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell to a sponsor or participant without the commissioner's approval. (B) In no event may the commissioner's approval be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell;

(A) No sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell to a sponsor or participant without the commissioner's approval.

(B) In no event may the commissioner's approval be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell;

(6) (A) All attributions of assets and liabilities to the protected cells and the general account shall be according to the plan of operation approved by the commissioner. (B) Other attribution of assets or liabilities shall not be made by a sponsored captive insurance company between its general account and a protected cell or between protected cells. (C) The sponsored captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to the protected cell. (D) The performance under the reinsurance contract and any tax benefits, losses, refunds, or credits allocated under a tax allocation agreement to which the sponsored captive insurance company is a party, including any payments made by or due to be made to the sponsored captive insurance company under the terms of the agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract that are attributed to the protected cell;

(A) All attributions of assets and liabilities to the protected cells and the general account shall be according to the plan of operation approved by the commissioner.

(B) Other attribution of assets or liabilities shall not be made by a sponsored captive insurance company between its general account and a protected cell or between protected cells.

(C) The sponsored captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to the protected cell.

(D) The performance under the reinsurance contract and any tax benefits, losses, refunds, or credits allocated under a tax allocation agreement to which the sponsored captive insurance company is a party, including any payments made by or due to be made to the sponsored captive insurance company under the terms of the agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract that are attributed to the protected cell;

(7) A sponsored captive insurance company shall file annually all the financial reports the commissioner requires, which shall include without limitation accounting statements detailing the financial experience of each protected cell;

(8) A sponsored captive insurance company shall notify the commissioner in writing within ten (10) business days of a protected cell that is insolvent or unable to meet its claim or expense obligations; and

(9) (A) No participant contract shall take effect without the commissioner's prior written approval. (B) The addition of each new protected cell and the withdrawal of any participant of any existing protected cell constitute a change in the business plan requiring the commissioner's prior written approval.

(A) No participant contract shall take effect without the commissioner's prior written approval.

(B) The addition of each new protected cell and the withdrawal of any participant of any existing protected cell constitute a change in the business plan requiring the commissioner's prior written approval.

(g) A protected cell of a sponsored captive insurance company may be formed as an incorporated protected cell subject to subsection (f) of this section and the following conditions: (1) (A) Subject to the prior written approval of the sponsored captive insurance company and of the commissioner, an incorporated protected cell may enter into contracts and undertake obligations in its own name and for its own account. (B) In the case of a contract or obligation to which the sponsored captive insurance company is not a party, either in its own name and for its own account or on behalf of a protected cell, the counterparty to the contract or obligation does not have a right or recourse against the sponsored captive insurance company and its assets other than against assets properly attributable to the incorporated protected cell that is a party to the contract or obligation; (2) (A) The articles of incorporation or articles of organization of an incorporated protected cell shall refer to the sponsored captive insurance company for which it is a protected cell and shall state that the protected cell is incorporated or organized for the limited purposes authorized by the sponsored captive insurance company's license. (B) A copy of the prior written approval of the commissioner to add the incorporated protected cell shall be attached to and filed with the articles of incorporation or the articles of organization; and (3) An incorporated protected cell shall have its own distinct name or designation, which shall include the words "Incorporated Cell" or the acronym "IC".

(1) (A) Subject to the prior written approval of the sponsored captive insurance company and of the commissioner, an incorporated protected cell may enter into contracts and undertake obligations in its own name and for its own account. (B) In the case of a contract or obligation to which the sponsored captive insurance company is not a party, either in its own name and for its own account or on behalf of a protected cell, the counterparty to the contract or obligation does not have a right or recourse against the sponsored captive insurance company and its assets other than against assets properly attributable to the incorporated protected cell that is a party to the contract or obligation;

(A) Subject to the prior written approval of the sponsored captive insurance company and of the commissioner, an incorporated protected cell may enter into contracts and undertake obligations in its own name and for its own account.

(B) In the case of a contract or obligation to which the sponsored captive insurance company is not a party, either in its own name and for its own account or on behalf of a protected cell, the counterparty to the contract or obligation does not have a right or recourse against the sponsored captive insurance company and its assets other than against assets properly attributable to the incorporated protected cell that is a party to the contract or obligation;

(2) (A) The articles of incorporation or articles of organization of an incorporated protected cell shall refer to the sponsored captive insurance company for which it is a protected cell and shall state that the protected cell is incorporated or organized for the limited purposes authorized by the sponsored captive insurance company's license. (B) A copy of the prior written approval of the commissioner to add the incorporated protected cell shall be attached to and filed with the articles of incorporation or the articles of organization; and

(A) The articles of incorporation or articles of organization of an incorporated protected cell shall refer to the sponsored captive insurance company for which it is a protected cell and shall state that the protected cell is incorporated or organized for the limited purposes authorized by the sponsored captive insurance company's license.

(B) A copy of the prior written approval of the commissioner to add the incorporated protected cell shall be attached to and filed with the articles of incorporation or the articles of organization; and

(3) An incorporated protected cell shall have its own distinct name or designation, which shall include the words "Incorporated Cell" or the acronym "IC".

(h) (1) A protected cell of a sponsored captive insurance company may be converted into an incorporated protected cell subject to the following conditions: (A) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cell or as otherwise permitted pursuant to a participation agreement, a sponsored captive insurance company may convert a protected cell into an incorporated protected cell without affecting the protected cell's assets, rights, benefits, obligations, and liabilities; and (B) The conversion shall be deemed: (i) For all purposes to be a continuation of the protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as an incorporated protected cell of the sponsored captive insurance company; and (ii) To occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities.

(1) A protected cell of a sponsored captive insurance company may be converted into an incorporated protected cell subject to the following conditions: (A) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cell or as otherwise permitted pursuant to a participation agreement, a sponsored captive insurance company may convert a protected cell into an incorporated protected cell without affecting the protected cell's assets, rights, benefits, obligations, and liabilities; and (B) The conversion shall be deemed: (i) For all purposes to be a continuation of the protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as an incorporated protected cell of the sponsored captive insurance company; and (ii) To occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities.

(A) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cell or as otherwise permitted pursuant to a participation agreement, a sponsored captive insurance company may convert a protected cell into an incorporated protected cell without affecting the protected cell's assets, rights, benefits, obligations, and liabilities; and

(B) The conversion shall be deemed: (i) For all purposes to be a continuation of the protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as an incorporated protected cell of the sponsored captive insurance company; and (ii) To occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities.

(i) For all purposes to be a continuation of the protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as an incorporated protected cell of the sponsored captive insurance company; and

(ii) To occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities.

(i) A protected cell of a sponsored captive insurance company may be sold, transferred, or assigned subject to the following conditions: (1) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cell, or as otherwise permitted under a participation agreement, or with the consent of the affected incorporated protected cell, a sponsored captive insurance company may sell, transfer, assign, and otherwise convey a protected cell or incorporated protected cell together with all of the protected cell's assets, rights, benefits, obligations, and liabilities to a new or existing sponsored captive insurance company, under a plan of operation that is approved by the commissioner; (2) The sale, transfer, assignment, or conveyance is a continuation of the protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as a protected cell of the transferee; and (3) The sale, transfer, assignment, or conveyance shall not be construed to limit any rights or protections applicable to the transferred protected cell or incorporated protected cell and the transferor sponsored captive insurance company that existed immediately before the sale, transfer, assignment, or conveyance.

(1) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cell, or as otherwise permitted under a participation agreement, or with the consent of the affected incorporated protected cell, a sponsored captive insurance company may sell, transfer, assign, and otherwise convey a protected cell or incorporated protected cell together with all of the protected cell's assets, rights, benefits, obligations, and liabilities to a new or existing sponsored captive insurance company, under a plan of operation that is approved by the commissioner;

(2) The sale, transfer, assignment, or conveyance is a continuation of the protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as a protected cell of the transferee; and

(3) The sale, transfer, assignment, or conveyance shall not be construed to limit any rights or protections applicable to the transferred protected cell or incorporated protected cell and the transferor sponsored captive insurance company that existed immediately before the sale, transfer, assignment, or conveyance.

(j) A protected cell of a sponsored captive insurance company may be converted to a new entity subject to the following conditions: (1) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant in the affected protected cells or as otherwise permitted under a participation agreement and the consent of each affected incorporated protected cell, a sponsored captive insurance company may convert one (1) or more protected cells or incorporated protected cells into a: (A) Single protected cell or incorporated protected cell; (B) New sponsored captive insurance company; (C) New pure captive insurance company; (D) New risk retention group; (E) New industrial insured captive insurance company; or (F) New association captive insurance company; (2) (A) The conversion shall be subject to this section as well as to a plan of operation approved by the commissioner, without affecting any protected cell's or incorporated protected cell's assets, rights, benefits, obligations, and liabilities. (B) The conversion is a continuation of each protected cell's or incorporated protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as a new protected cell or incorporated protected cell, a licensed sponsored captive insurance company, a pure captive insurance company, a risk retention group, an industrial insured captive insurance company, or an association captive insurance company, as applicable. (C) The conversion shall occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities; and (3) The conversion shall not be construed to limit any rights or protections applicable to any converted protected cell or incorporated protected cell and the sponsored captive insurance company, as applicable, that existed immediately before the date of the conversion.

(1) Subject to the prior written approval of the commissioner, on application of the sponsor and with the prior consent of each participant in the affected protected cells or as otherwise permitted under a participation agreement and the consent of each affected incorporated protected cell, a sponsored captive insurance company may convert one (1) or more protected cells or incorporated protected cells into a: (A) Single protected cell or incorporated protected cell; (B) New sponsored captive insurance company; (C) New pure captive insurance company; (D) New risk retention group; (E) New industrial insured captive insurance company; or (F) New association captive insurance company;

(A) Single protected cell or incorporated protected cell;

(B) New sponsored captive insurance company;

(C) New pure captive insurance company;

(D) New risk retention group;

(E) New industrial insured captive insurance company; or

(F) New association captive insurance company;

(2) (A) The conversion shall be subject to this section as well as to a plan of operation approved by the commissioner, without affecting any protected cell's or incorporated protected cell's assets, rights, benefits, obligations, and liabilities. (B) The conversion is a continuation of each protected cell's or incorporated protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as a new protected cell or incorporated protected cell, a licensed sponsored captive insurance company, a pure captive insurance company, a risk retention group, an industrial insured captive insurance company, or an association captive insurance company, as applicable. (C) The conversion shall occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities; and

(A) The conversion shall be subject to this section as well as to a plan of operation approved by the commissioner, without affecting any protected cell's or incorporated protected cell's assets, rights, benefits, obligations, and liabilities.

(B) The conversion is a continuation of each protected cell's or incorporated protected cell's existence together with all of its assets, rights, benefits, obligations, and liabilities, as a new protected cell or incorporated protected cell, a licensed sponsored captive insurance company, a pure captive insurance company, a risk retention group, an industrial insured captive insurance company, or an association captive insurance company, as applicable.

(C) The conversion shall occur without any transfer or assignment of assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, assets, rights, benefits, obligations, and liabilities; and

(3) The conversion shall not be construed to limit any rights or protections applicable to any converted protected cell or incorporated protected cell and the sponsored captive insurance company, as applicable, that existed immediately before the date of the conversion.

(k) (1) Upon an order of supervision, rehabilitation, or liquidation of a sponsored captive insurance company, the receiver shall manage the assets and liabilities of the sponsored captive insurance company under this subsection. (2) In connection with the conservation, rehabilitation, or liquidation of a sponsored captive insurance company, the assets and liabilities of a protected cell shall at all times be kept separate from, and shall not be commingled with, those of other protected cells and the sponsored captive insurance company. (3) The assets of a protected cell shall not be used to pay any expenses or claims other than those attributable to the protected cell. (4) (A) Unless the sponsor consents and the commissioner has granted prior written approval, the assets of the sponsored captive insurance company's general account shall not be used to pay any expenses or claims attributable solely to a protected cell of the sponsored captive insurance company. (B) If the assets of the sponsored captive insurance company's general account are used to pay expenses or claims attributable solely to a protected cell of the sponsored captive insurance company, the sponsor is not required to contribute additional capital and surplus to the sponsored captive insurance company's general account, notwithstanding the provisions of §§ 23-63-1604 and 23-63-1605 . (5) A sponsored captive insurance company's capital and surplus shall at all times be available to pay any expenses of or claims against the sponsored captive insurance company. (6) In the event of the insolvency of a sponsored captive insurance company in which the commissioner determines that one (1) or more protected cells remain solvent, the commissioner may separate the protected cells from the sponsored captive insurance company and, on application of the sponsor, may allow for the conversion of the protected cells into one (1) or more new or existing sponsored captive insurance companies, or one (1) or more other captive insurance companies, under a plan of operation approved by the commissioner.

(1) Upon an order of supervision, rehabilitation, or liquidation of a sponsored captive insurance company, the receiver shall manage the assets and liabilities of the sponsored captive insurance company under this subsection.

(2) In connection with the conservation, rehabilitation, or liquidation of a sponsored captive insurance company, the assets and liabilities of a protected cell shall at all times be kept separate from, and shall not be commingled with, those of other protected cells and the sponsored captive insurance company.

(3) The assets of a protected cell shall not be used to pay any expenses or claims other than those attributable to the protected cell.

(4) (A) Unless the sponsor consents and the commissioner has granted prior written approval, the assets of the sponsored captive insurance company's general account shall not be used to pay any expenses or claims attributable solely to a protected cell of the sponsored captive insurance company. (B) If the assets of the sponsored captive insurance company's general account are used to pay expenses or claims attributable solely to a protected cell of the sponsored captive insurance company, the sponsor is not required to contribute additional capital and surplus to the sponsored captive insurance company's general account, notwithstanding the provisions of §§ 23-63-1604 and 23-63-1605 .

(A) Unless the sponsor consents and the commissioner has granted prior written approval, the assets of the sponsored captive insurance company's general account shall not be used to pay any expenses or claims attributable solely to a protected cell of the sponsored captive insurance company.

(B) If the assets of the sponsored captive insurance company's general account are used to pay expenses or claims attributable solely to a protected cell of the sponsored captive insurance company, the sponsor is not required to contribute additional capital and surplus to the sponsored captive insurance company's general account, notwithstanding the provisions of §§ 23-63-1604 and 23-63-1605 .

(5) A sponsored captive insurance company's capital and surplus shall at all times be available to pay any expenses of or claims against the sponsored captive insurance company.

(6) In the event of the insolvency of a sponsored captive insurance company in which the commissioner determines that one (1) or more protected cells remain solvent, the commissioner may separate the protected cells from the sponsored captive insurance company and, on application of the sponsor, may allow for the conversion of the protected cells into one (1) or more new or existing sponsored captive insurance companies, or one (1) or more other captive insurance companies, under a plan of operation approved by the commissioner.

(l) (1) (A) A creditor of a sponsored captive insurance company shall have recourse against the assets attributable to a protected cell only if it is a creditor of the protected cell. (B) A creditor of a protected cell shall not be entitled to recourse against the assets attributable to another protected cell or to the assets in the sponsored captive insurance company's general account. (2) When a sponsored captive insurance company has an obligation to a creditor arising from a transaction or otherwise imposed with respect to a protected cell, the obligation shall: (A) Extend only to the assets attributable to that protected cell, and the creditor shall be entitled to recourse only against the assets attributable to that protected cell; and (B) Not extend to the assets of another protected cell or to the assets in the sponsored captive insurance company's general account, and the creditor shall not be entitled to recourse against the assets attributable to another protected cell or to the assets of the sponsored captive insurance company's general account. (3) When an obligation of a sponsored captive insurance company relates solely to its general account, a creditor shall have recourse only against the assets in the general account. (4) The establishment of one (1) or more protected cells alone, and without more, shall not constitute or be deemed to be a fraudulent conveyance, an intent by the sponsored captive insurance company to defraud creditors, or the carrying out of business by the sponsored captive insurance company for any other fraudulent purpose.

(1) (A) A creditor of a sponsored captive insurance company shall have recourse against the assets attributable to a protected cell only if it is a creditor of the protected cell. (B) A creditor of a protected cell shall not be entitled to recourse against the assets attributable to another protected cell or to the assets in the sponsored captive insurance company's general account.

(A) A creditor of a sponsored captive insurance company shall have recourse against the assets attributable to a protected cell only if it is a creditor of the protected cell.

(B) A creditor of a protected cell shall not be entitled to recourse against the assets attributable to another protected cell or to the assets in the sponsored captive insurance company's general account.

(2) When a sponsored captive insurance company has an obligation to a creditor arising from a transaction or otherwise imposed with respect to a protected cell, the obligation shall: (A) Extend only to the assets attributable to that protected cell, and the creditor shall be entitled to recourse only against the assets attributable to that protected cell; and (B) Not extend to the assets of another protected cell or to the assets in the sponsored captive insurance company's general account, and the creditor shall not be entitled to recourse against the assets attributable to another protected cell or to the assets of the sponsored captive insurance company's general account.

(A) Extend only to the assets attributable to that protected cell, and the creditor shall be entitled to recourse only against the assets attributable to that protected cell; and

(B) Not extend to the assets of another protected cell or to the assets in the sponsored captive insurance company's general account, and the creditor shall not be entitled to recourse against the assets attributable to another protected cell or to the assets of the sponsored captive insurance company's general account.

(3) When an obligation of a sponsored captive insurance company relates solely to its general account, a creditor shall have recourse only against the assets in the general account.

(4) The establishment of one (1) or more protected cells alone, and without more, shall not constitute or be deemed to be a fraudulent conveyance, an intent by the sponsored captive insurance company to defraud creditors, or the carrying out of business by the sponsored captive insurance company for any other fraudulent purpose.

(m) It is the intent of the General Assembly under this section to provide sponsored captive insurance companies with the option to establish one (1) or more protected cells as a separate legal entity.

(n) This section does not limit any rights or protections applicable to protected cells that are not established as separate legal entities.

Amended by Act 2023, No. 469,§ 6, eff. 8/1/2023.

Amended by Act 2021, No. 481,§ 1, eff. 7/28/2021.

Amended by Act 2019, No. 521,§ 14, eff. 7/24/2019.

Amended by Act 2017, No. 370,§ 9, eff. 8/1/2017.

Amended by Act 2017, No. 370,§ 8, eff. 8/1/2017.

Acts 2001, No. 1391, § 20.
Ark. Code Ann. § 23-4-204 — AR Code / Title 23 / Chapter 4 / Subchapter 2 / Section 23-4-204
Water, gas, or electricity - Disconnecting charges unlawful - Penalty
Status: in_force

(a) It shall be unlawful for any public utility furnishing water, gas, or electricity to the general public to make a charge for disconnecting service. (b) Any public utility described in subsection (a) of this section which makes a charge for disconnecting service in violation of this section shall be fined in any sum not less than one hundred dollars ($100) nor more than five hundred dollars ($500), and each violation shall constitute a separate offense. Acts 1957, No. 275, §§ 1, 3; A.S.A. 1947, §§ 73-204.1, 73-204.3.

(a) It shall be unlawful for any public utility furnishing water, gas, or electricity to the general public to make a charge for disconnecting service.

(b) Any public utility described in subsection (a) of this section which makes a charge for disconnecting service in violation of this section shall be fined in any sum not less than one hundred dollars ($100) nor more than five hundred dollars ($500), and each violation shall constitute a separate offense.

Acts 1957, No. 275, §§ 1, 3; A.S.A. 1947, §§ 73-204.1, 73-204.3.
Ark. Code Ann. § 23-38-205 — AR Code / Title 23 / Chapter 38 / Subchapter 2 / Section 23-38-205
[Repealed]
Status: repealed

Repealed by Act 2013, No. 1144,§ 4, eff. 8/16/2013. Acts 1929, No. 128, § 19; 1931, No. 236, § 10; Pope's Dig., § 995; A.S.A. 1947, § 67-811.

Repealed by Act 2013, No. 1144,§ 4, eff. 8/16/2013.

Acts 1929, No. 128, § 19; 1931, No. 236, § 10; Pope's Dig., § 995; A.S.A. 1947, § 67-811.
Ark. Code Ann. § 23-3-109 — AR Code / Title 23 / Chapter 3 / Subchapter 1 / Section 23-3-109
Annual statements of gross earnings
Status: in_force

(a) Annually, during the month of March, each utility subject by law to the payment of fees or charges under the jurisdiction of either the Arkansas Public Service Commission or the Arkansas Department of Transportation shall prepare and transmit to the Arkansas Public Service Commission or the department having jurisdiction over the utility a certified statement of the gross earnings from its properties in Arkansas for the preceding calendar year ending December 31. (b) No deduction shall be made from the gross earnings on account of any payments, expenses, or uncollectible accounts, except refunds occasioned by errors or overcharge. (c) Upon receipt of these certified statements, the commission or the department shall determine the total gross earnings of all of the utilities. (d) However, any utility may deduct from its gross earnings any amounts derived from wholesale sales of electricity to any other utility, an electric cooperative corporation, or any other entity at wholesale rates regulated by the Arkansas Public Service Commission or the Federal Energy Regulatory Commission. Amended by Act 2017, No. 707,§ 106, eff. 8/1/2017. Acts 1945, No. 40, § 3; 1949, No. 262, § 7; A.S.A. 1947, § 73-248; Acts 1987, No. 831, § 1.

(a) Annually, during the month of March, each utility subject by law to the payment of fees or charges under the jurisdiction of either the Arkansas Public Service Commission or the Arkansas Department of Transportation shall prepare and transmit to the Arkansas Public Service Commission or the department having jurisdiction over the utility a certified statement of the gross earnings from its properties in Arkansas for the preceding calendar year ending December 31.

(b) No deduction shall be made from the gross earnings on account of any payments, expenses, or uncollectible accounts, except refunds occasioned by errors or overcharge.

(c) Upon receipt of these certified statements, the commission or the department shall determine the total gross earnings of all of the utilities.

(d) However, any utility may deduct from its gross earnings any amounts derived from wholesale sales of electricity to any other utility, an electric cooperative corporation, or any other entity at wholesale rates regulated by the Arkansas Public Service Commission or the Federal Energy Regulatory Commission.

Amended by Act 2017, No. 707,§ 106, eff. 8/1/2017.

Acts 1945, No. 40, § 3; 1949, No. 262, § 7; A.S.A. 1947, § 73-248; Acts 1987, No. 831, § 1.
Ark. Code Ann. § 23-61-105 — AR Code / Title 23 / Chapter 61 / Subchapter 1 / Section 23-61-105
Insurance Commissioner, deputies, assistants, and other employees - Expense allowance
Status: in_force

(a) In addition to compensation for their services, the Insurance Commissioner, his or her deputies, assistants, and other Department of Commerce employees performing duties or working within the State Insurance Department shall be paid their actual and necessary expenses as authorized by the commissioner and incurred by them in the performance of their duties, subject to such limitations as may be otherwise applicable pursuant to law. (b) An itemized statement of all expenses for which payment is being claimed shall be certified by the claimant and attached to the expense voucher. Amended by Act 2019, No. 910,§ 594, eff. 7/1/2019. Acts 1959, No. 148, § 20; A.S.A. 1947, § 66-2105.

(a) In addition to compensation for their services, the Insurance Commissioner, his or her deputies, assistants, and other Department of Commerce employees performing duties or working within the State Insurance Department shall be paid their actual and necessary expenses as authorized by the commissioner and incurred by them in the performance of their duties, subject to such limitations as may be otherwise applicable pursuant to law.

(b) An itemized statement of all expenses for which payment is being claimed shall be certified by the claimant and attached to the expense voucher.

Amended by Act 2019, No. 910,§ 594, eff. 7/1/2019.

Acts 1959, No. 148, § 20; A.S.A. 1947, § 66-2105.
Ark. Code Ann. § 23-97-307 — AR Code / Title 23 / Chapter 97 / Subchapter 3 / Section 23-97-307
Disclosure and performance standards for long-term care insurance
Status: in_force

(a) The Insurance Commissioner may adopt rules for long-term care insurance that include, but are not limited to, standards for full and fair disclosure addressing: (1) The manner, content, and required disclosures for the sale of long-term care insurance policies; (2) Terms of renewability; (3) Initial and subsequent conditions of eligibility; (4) Nonduplication of coverage provisions; (5) Coverage of dependents; (6) Preexisting conditions; (7) Termination of insurance; (8) Continuation or conversion of coverage; (9) Probationary periods; (10) Limitations, exceptions, reductions, and elimination periods; (11) Requirements for replacement; (12) Recurrent conditions; and (13) Definitions of terms. (b) No long-term care insurance policy shall: (1) Be cancelled, not renewed, or otherwise terminated because of age or the deterioration of the mental or physical health of the insured individual or certificate holder; (2) Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form of coverage within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or (3) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care within a facility than coverage for lower levels of care. Amended by Act 2019, No. 315,§ 2790, eff. 7/24/2019. Acts 2005, No. 1697, § 31.

(a) The Insurance Commissioner may adopt rules for long-term care insurance that include, but are not limited to, standards for full and fair disclosure addressing: (1) The manner, content, and required disclosures for the sale of long-term care insurance policies; (2) Terms of renewability; (3) Initial and subsequent conditions of eligibility; (4) Nonduplication of coverage provisions; (5) Coverage of dependents; (6) Preexisting conditions; (7) Termination of insurance; (8) Continuation or conversion of coverage; (9) Probationary periods; (10) Limitations, exceptions, reductions, and elimination periods; (11) Requirements for replacement; (12) Recurrent conditions; and (13) Definitions of terms.

(1) The manner, content, and required disclosures for the sale of long-term care insurance policies;

(2) Terms of renewability;

(3) Initial and subsequent conditions of eligibility;

(4) Nonduplication of coverage provisions;

(5) Coverage of dependents;

(6) Preexisting conditions;

(7) Termination of insurance;

(8) Continuation or conversion of coverage;

(9) Probationary periods;

(10) Limitations, exceptions, reductions, and elimination periods;

(11) Requirements for replacement;

(12) Recurrent conditions; and

(13) Definitions of terms.

(b) No long-term care insurance policy shall: (1) Be cancelled, not renewed, or otherwise terminated because of age or the deterioration of the mental or physical health of the insured individual or certificate holder; (2) Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form of coverage within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or (3) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care within a facility than coverage for lower levels of care.

(1) Be cancelled, not renewed, or otherwise terminated because of age or the deterioration of the mental or physical health of the insured individual or certificate holder;

(2) Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form of coverage within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or

(3) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care within a facility than coverage for lower levels of care.

Amended by Act 2019, No. 315,§ 2790, eff. 7/24/2019.

Acts 2005, No. 1697, § 31.