Ark. Code Ann. § 23-62-205 — AR Code / Title 23 / Chapter 62 / Subchapter 2 / Section 23-62-205
Approval and notice of reinsurance
Status: in_force

(a) Every insurer authorized to do business in the State of Arkansas, whether foreign, domestic, or alien, including, but not limited to, farmers' mutual aid associations or companies, reciprocal insurers, stipulated premium insurers, mutual assessment life and disability companies, and foreign fraternal benefit societies, shall petition the Insurance Commissioner for prior approval of any agreement of assumption reinsurance which provides for the ceding of Arkansas risks to an insurer not authorized to do business in this state. (b) After notice and hearing, the commissioner may approve the agreement for reinsurance if it is found: (1) That the agreement is fair and equitable and does not lessen or diminish any benefit to a policyholder which would have been provided by the ceding entity; (2) That the agreement promotes the public interest and does not create a monopoly; (3) That the agreement is not harmful to the best interests of the policyholders; (4) That the agreement will not impair the financial condition of either the ceding insurer or the assuming insurer; (5) That the assuming insurer is in sound financial condition; and (6) That the assumption certificates, after being filed with and approved by the commissioner, shall be given to Arkansas policyholders affected by the agreement, provided, that notice to credit life and credit disability policyholders may be given to the creditor beneficiary of the credit life or credit disability policy. (c) The commissioner, in his or her sole discretion, may waive notice and hearing as to any agreement under subsection (b) of this section pursuant to written motion by any party to the agreement. (d) (1) Every insurer authorized to do business in the State of Arkansas, whether foreign, domestic, or alien, including, but not limited to, farmers' mutual aid associations or companies, reciprocal insurers, stipulated premium insurers, mutual assessment life and disability companies, and foreign fraternal benefit societies, shall file with the commissioner any agreement of assumption reinsurance which provides for the ceding of Arkansas risks to any insurer authorized to do business in this state. The agreement shall be deemed approved within thirty (30) days after the date filed. (2) This subsection shall not apply to any agreement for assumption reinsurance which cedes Arkansas risks if the assuming insurer is authorized to do business in this state and the transaction is approved by the state insurance regulator of the domiciliary state of the ceding insurer. (e) Any assumption certificates issued to Arkansas policyholders pursuant to assumption reinsurance agreements shall be filed with and approved by the commissioner prior to delivery to policyholders. (f) Domestic stock and domestic mutual insurers shall be exempt from the requirements of subsections (a)-(d) of this section, but shall comply with the provisions of §§ 23-69-149 and 23-69-150 , respectively. (g) Domestic fraternal benefit societies shall be exempt from the requirements of subsections (a)-(d) of this section, but shall comply with the provisions of § 23-74-304 . Acts 1959, No. 148, § 81; 1985, No. 804, § 8; A.S.A. 1947, § 66-2410; Acts 1991, No. 804, § 1; 2001, No. 1604, §§ 11-13.

(a) Every insurer authorized to do business in the State of Arkansas, whether foreign, domestic, or alien, including, but not limited to, farmers' mutual aid associations or companies, reciprocal insurers, stipulated premium insurers, mutual assessment life and disability companies, and foreign fraternal benefit societies, shall petition the Insurance Commissioner for prior approval of any agreement of assumption reinsurance which provides for the ceding of Arkansas risks to an insurer not authorized to do business in this state.

(b) After notice and hearing, the commissioner may approve the agreement for reinsurance if it is found: (1) That the agreement is fair and equitable and does not lessen or diminish any benefit to a policyholder which would have been provided by the ceding entity; (2) That the agreement promotes the public interest and does not create a monopoly; (3) That the agreement is not harmful to the best interests of the policyholders; (4) That the agreement will not impair the financial condition of either the ceding insurer or the assuming insurer; (5) That the assuming insurer is in sound financial condition; and (6) That the assumption certificates, after being filed with and approved by the commissioner, shall be given to Arkansas policyholders affected by the agreement, provided, that notice to credit life and credit disability policyholders may be given to the creditor beneficiary of the credit life or credit disability policy.

(1) That the agreement is fair and equitable and does not lessen or diminish any benefit to a policyholder which would have been provided by the ceding entity;

(2) That the agreement promotes the public interest and does not create a monopoly;

(3) That the agreement is not harmful to the best interests of the policyholders;

(4) That the agreement will not impair the financial condition of either the ceding insurer or the assuming insurer;

(5) That the assuming insurer is in sound financial condition; and

(6) That the assumption certificates, after being filed with and approved by the commissioner, shall be given to Arkansas policyholders affected by the agreement, provided, that notice to credit life and credit disability policyholders may be given to the creditor beneficiary of the credit life or credit disability policy.

(c) The commissioner, in his or her sole discretion, may waive notice and hearing as to any agreement under subsection (b) of this section pursuant to written motion by any party to the agreement.

(d) (1) Every insurer authorized to do business in the State of Arkansas, whether foreign, domestic, or alien, including, but not limited to, farmers' mutual aid associations or companies, reciprocal insurers, stipulated premium insurers, mutual assessment life and disability companies, and foreign fraternal benefit societies, shall file with the commissioner any agreement of assumption reinsurance which provides for the ceding of Arkansas risks to any insurer authorized to do business in this state. The agreement shall be deemed approved within thirty (30) days after the date filed. (2) This subsection shall not apply to any agreement for assumption reinsurance which cedes Arkansas risks if the assuming insurer is authorized to do business in this state and the transaction is approved by the state insurance regulator of the domiciliary state of the ceding insurer.

(1) Every insurer authorized to do business in the State of Arkansas, whether foreign, domestic, or alien, including, but not limited to, farmers' mutual aid associations or companies, reciprocal insurers, stipulated premium insurers, mutual assessment life and disability companies, and foreign fraternal benefit societies, shall file with the commissioner any agreement of assumption reinsurance which provides for the ceding of Arkansas risks to any insurer authorized to do business in this state. The agreement shall be deemed approved within thirty (30) days after the date filed.

(2) This subsection shall not apply to any agreement for assumption reinsurance which cedes Arkansas risks if the assuming insurer is authorized to do business in this state and the transaction is approved by the state insurance regulator of the domiciliary state of the ceding insurer.

(e) Any assumption certificates issued to Arkansas policyholders pursuant to assumption reinsurance agreements shall be filed with and approved by the commissioner prior to delivery to policyholders.

(f) Domestic stock and domestic mutual insurers shall be exempt from the requirements of subsections (a)-(d) of this section, but shall comply with the provisions of §§ 23-69-149 and 23-69-150 , respectively.

(g) Domestic fraternal benefit societies shall be exempt from the requirements of subsections (a)-(d) of this section, but shall comply with the provisions of § 23-74-304 .

Acts 1959, No. 148, § 81; 1985, No. 804, § 8; A.S.A. 1947, § 66-2410; Acts 1991, No. 804, § 1; 2001, No. 1604, §§ 11-13.
Ark. Code Ann. § 23-114-402 — AR Code / Title 23 / Chapter 114 / Subchapter 4 / Section 23-114-402
Restrictions on premises and equipment providers
Status: in_force

A person shall not lease or otherwise make a premises or equipment available for conducting a raffle or a game of bingo for any direct or indirect consideration in excess of the bona fide reasonable fair market rental value of the premises or equipment, and no portion of the consideration for premises or equipment shall be based upon a percentage or specified portion of the revenue or profit from games of bingo or raffles conducted by a licensed authorized organization. Acts 2007, No. 388, § 1.

A person shall not lease or otherwise make a premises or equipment available for conducting a raffle or a game of bingo for any direct or indirect consideration in excess of the bona fide reasonable fair market rental value of the premises or equipment, and no portion of the consideration for premises or equipment shall be based upon a percentage or specified portion of the revenue or profit from games of bingo or raffles conducted by a licensed authorized organization.

Acts 2007, No. 388, § 1.
Ark. Code Ann. § 23-13-221 — AR Code / Title 23 / Chapter 13 / Subchapter 2 / Section 23-13-221
Certificate of public convenience and necessity - Terms and conditions
Status: in_force

(a) (1) Any certificate of public convenience and necessity issued under this subchapter shall specify: (A) The service to be rendered and the route over which; (B) The fixed termini, if any, between which; (C) The intermediate and off-route points, if any, at which; and (D) In case of operations not over specified routes or between fixed termini, the territory within which the motor carrier is authorized to operate. (2) (A) At the time of issuance and from time to time thereafter, there shall be attached to the exercise of the privileges granted by the certificate such reasonable terms, conditions, and limitations as the public convenience and necessity may from time to time require, including terms, conditions, and limitations as to the extension of the routes of the carrier and such terms and conditions as are necessary to carry out, with respect to the operations of the carrier, the requirements established by the Arkansas Department of Transportation under this subchapter. (B) However, no terms, conditions, or limitations shall restrict the right of the carrier to add to his or her or its equipment and facilities over the routes, between the termini, or within the territory specified in the certificate as the development of the business and the demands of the public shall require. (b) A common carrier by motor vehicle operating under any such certificate may occasionally deviate from the route over which, or the fixed termini between which, it is authorized to operate under the certificate under such general or special rules as the department may prescribe. (c) Any common carrier by motor vehicle transporting passengers under a certificate issued under this subchapter may transport to any place within the state special or chartered parties under such rules as the department may prescribe. (d) A certificate for the transportation of passengers may include authority to transport, in the same vehicle with the passengers, newspapers, baggage of passengers, express, or mail, or authority to transport baggage of passengers in a separate vehicle. (e) No certificate issued under this subchapter shall confer any proprietary or property rights in the use of the public highways. Amended by Act 2019, No. 315,§ 2424, eff. 7/24/2019. Amended by Act 2017, No. 707,§ 197, eff. 8/1/2017. Acts 1955, No. 397, §§ 9, 10; A.S.A. 1947, §§ 73-1762, 73-1763.

(a) (1) Any certificate of public convenience and necessity issued under this subchapter shall specify: (A) The service to be rendered and the route over which; (B) The fixed termini, if any, between which; (C) The intermediate and off-route points, if any, at which; and (D) In case of operations not over specified routes or between fixed termini, the territory within which the motor carrier is authorized to operate. (2) (A) At the time of issuance and from time to time thereafter, there shall be attached to the exercise of the privileges granted by the certificate such reasonable terms, conditions, and limitations as the public convenience and necessity may from time to time require, including terms, conditions, and limitations as to the extension of the routes of the carrier and such terms and conditions as are necessary to carry out, with respect to the operations of the carrier, the requirements established by the Arkansas Department of Transportation under this subchapter. (B) However, no terms, conditions, or limitations shall restrict the right of the carrier to add to his or her or its equipment and facilities over the routes, between the termini, or within the territory specified in the certificate as the development of the business and the demands of the public shall require.

(1) Any certificate of public convenience and necessity issued under this subchapter shall specify: (A) The service to be rendered and the route over which; (B) The fixed termini, if any, between which; (C) The intermediate and off-route points, if any, at which; and (D) In case of operations not over specified routes or between fixed termini, the territory within which the motor carrier is authorized to operate.

(A) The service to be rendered and the route over which;

(B) The fixed termini, if any, between which;

(C) The intermediate and off-route points, if any, at which; and

(D) In case of operations not over specified routes or between fixed termini, the territory within which the motor carrier is authorized to operate.

(2) (A) At the time of issuance and from time to time thereafter, there shall be attached to the exercise of the privileges granted by the certificate such reasonable terms, conditions, and limitations as the public convenience and necessity may from time to time require, including terms, conditions, and limitations as to the extension of the routes of the carrier and such terms and conditions as are necessary to carry out, with respect to the operations of the carrier, the requirements established by the Arkansas Department of Transportation under this subchapter. (B) However, no terms, conditions, or limitations shall restrict the right of the carrier to add to his or her or its equipment and facilities over the routes, between the termini, or within the territory specified in the certificate as the development of the business and the demands of the public shall require.

(A) At the time of issuance and from time to time thereafter, there shall be attached to the exercise of the privileges granted by the certificate such reasonable terms, conditions, and limitations as the public convenience and necessity may from time to time require, including terms, conditions, and limitations as to the extension of the routes of the carrier and such terms and conditions as are necessary to carry out, with respect to the operations of the carrier, the requirements established by the Arkansas Department of Transportation under this subchapter.

(B) However, no terms, conditions, or limitations shall restrict the right of the carrier to add to his or her or its equipment and facilities over the routes, between the termini, or within the territory specified in the certificate as the development of the business and the demands of the public shall require.

(b) A common carrier by motor vehicle operating under any such certificate may occasionally deviate from the route over which, or the fixed termini between which, it is authorized to operate under the certificate under such general or special rules as the department may prescribe.

(c) Any common carrier by motor vehicle transporting passengers under a certificate issued under this subchapter may transport to any place within the state special or chartered parties under such rules as the department may prescribe.

(d) A certificate for the transportation of passengers may include authority to transport, in the same vehicle with the passengers, newspapers, baggage of passengers, express, or mail, or authority to transport baggage of passengers in a separate vehicle.

(e) No certificate issued under this subchapter shall confer any proprietary or property rights in the use of the public highways.

Amended by Act 2019, No. 315,§ 2424, eff. 7/24/2019.

Amended by Act 2017, No. 707,§ 197, eff. 8/1/2017.

Acts 1955, No. 397, §§ 9, 10; A.S.A. 1947, §§ 73-1762, 73-1763.
Ark. Code Ann. § 23-38-219 — AR Code / Title 23 / Chapter 38 / Subchapter 2 / Section 23-38-219
[Repealed]
Status: repealed

Repealed by Act 2013, No. 1144,§ 4, eff. 8/16/2013. Acts 1932 (2nd Ex. Sess.), No. 11, § 1; Pope's Dig., § 1028; A.S.A. 1947, § 67-839.

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

Acts 1932 (2nd Ex. Sess.), No. 11, § 1; Pope's Dig., § 1028; A.S.A. 1947, § 67-839.
Ark. Code Ann. § 23-48-306 — AR Code / Title 23 / Chapter 48 / Subchapter 3 / Section 23-48-306
Relocation of place of business - Amendment of articles
Status: in_force

(a) (1) Any state bank may apply for authority to change its place of business from one (1) municipality to another by filing with the Bank Commissioner, as an amendment to its articles of incorporation, two (2) copies of a resolution to that effect, and such additional information which the commissioner may require. (2) The resolution must be adopted upon the affirmative vote of the holders of at least a simple majority of the outstanding shares entitled to vote thereon, at any annual or special meeting of the stockholders. (3) Both copies of the resolution shall be signed by the president or chief executive officer or a vice president. (4) One (1) of the copies of the resolution shall be retained by the commissioner. The other copy, if the commissioner and State Banking Board approve the amendment, shall be returned with the commissioner's endorsement of approval thereof. (b) The amendment shall become effective when it has been approved by the commissioner and the board. (c) Each application for authority to change a state bank's place of business shall be accompanied by a fee as shall be set by State Bank Department rule, which fee shall be paid to the department. Amended by Act 2019, No. 315,§ 2544, eff. 7/24/2019. Amended by Act 2017, No. 198,§ 5, eff. 8/1/2017. Acts 1997, No. 89, § 1.

(a) (1) Any state bank may apply for authority to change its place of business from one (1) municipality to another by filing with the Bank Commissioner, as an amendment to its articles of incorporation, two (2) copies of a resolution to that effect, and such additional information which the commissioner may require. (2) The resolution must be adopted upon the affirmative vote of the holders of at least a simple majority of the outstanding shares entitled to vote thereon, at any annual or special meeting of the stockholders. (3) Both copies of the resolution shall be signed by the president or chief executive officer or a vice president. (4) One (1) of the copies of the resolution shall be retained by the commissioner. The other copy, if the commissioner and State Banking Board approve the amendment, shall be returned with the commissioner's endorsement of approval thereof.

(1) Any state bank may apply for authority to change its place of business from one (1) municipality to another by filing with the Bank Commissioner, as an amendment to its articles of incorporation, two (2) copies of a resolution to that effect, and such additional information which the commissioner may require.

(2) The resolution must be adopted upon the affirmative vote of the holders of at least a simple majority of the outstanding shares entitled to vote thereon, at any annual or special meeting of the stockholders.

(3) Both copies of the resolution shall be signed by the president or chief executive officer or a vice president.

(4) One (1) of the copies of the resolution shall be retained by the commissioner. The other copy, if the commissioner and State Banking Board approve the amendment, shall be returned with the commissioner's endorsement of approval thereof.

(b) The amendment shall become effective when it has been approved by the commissioner and the board.

(c) Each application for authority to change a state bank's place of business shall be accompanied by a fee as shall be set by State Bank Department rule, which fee shall be paid to the department.

Amended by Act 2019, No. 315,§ 2544, eff. 7/24/2019.

Amended by Act 2017, No. 198,§ 5, eff. 8/1/2017.

Acts 1997, No. 89, § 1.
Ark. Code Ann. § 23-10-303 — AR Code / Title 23 / Chapter 10 / Subchapter 3 / Section 23-10-303
Goods damaged in transit - Liability generally
Status: in_force

(a) Whenever any property is received by a common carrier to be transferred from one place to another, within or without this state, or when a railroad or other transportation company issues receipts or bills of lading in this state, the common carrier, railroad, or transportation company issuing the receipt or bill of lading shall be liable for any loss or damage or injury to the property caused by its negligence or the negligence of any other common carrier, railroad, or transportation company to which the property may pass. (b) The common carrier, railroad, or transportation company issuing any receipt or bill of lading shall be entitled to recover, in a proper action, the amount of any loss, damage, or injury it may be required to pay to the owner of the property, from the common carrier, railroad, or transportation company through whose negligence the loss, damage, or injury may be sustained. Acts 1907, No. 270, § 1, p. 619; C. & M. Dig., § 924; Pope's Dig., § 1128; A.S.A. 1947, § 73-1352.

(a) Whenever any property is received by a common carrier to be transferred from one place to another, within or without this state, or when a railroad or other transportation company issues receipts or bills of lading in this state, the common carrier, railroad, or transportation company issuing the receipt or bill of lading shall be liable for any loss or damage or injury to the property caused by its negligence or the negligence of any other common carrier, railroad, or transportation company to which the property may pass.

(b) The common carrier, railroad, or transportation company issuing any receipt or bill of lading shall be entitled to recover, in a proper action, the amount of any loss, damage, or injury it may be required to pay to the owner of the property, from the common carrier, railroad, or transportation company through whose negligence the loss, damage, or injury may be sustained.

Acts 1907, No. 270, § 1, p. 619; C. & M. Dig., § 924; Pope's Dig., § 1128; A.S.A. 1947, § 73-1352.
Ark. Code Ann. § 23-63-201 — AR Code / Title 23 / Chapter 63 / Subchapter 2 / Section 23-63-201
Certificate of authority required - Exceptions
Status: in_force

(a) No person shall act as an insurer and no insurer shall transact insurance in this state unless authorized by a subsisting certificate of authority issued to it by the Insurance Commissioner except as to such transactions as are expressly otherwise provided for in the Arkansas Insurance Code. (b) A certificate of authority shall not be required of an insurer with respect to the following: (1) Investigation, settlement, or litigation of claims under its policies lawfully written in Arkansas, or making change of beneficiary or other modifications of an insurance or annuity contract, or otherwise administering insurance or annuity contracts in force, or liquidation of assets and liabilities of the insurer, other than collection of new premiums, all as resulting from its former authorized operations in Arkansas; (2) Transactions subsequent to issuance of or relative to a policy covering only subjects of insurance not resident, located, or expressly to be performed in Arkansas at time of issuance, or covering property in course of transportation by land, air, or water to, from, or through Arkansas and including any preparation or storage incidental thereto, and lawfully solicited, written, or delivered outside Arkansas; or (3) Transactions pursuant to surplus lines coverages lawfully written under § 23-65-101 et seq.; the Unauthorized Insurers Process Act, § 23-65-201 et seq.; and the Surplus Lines Insurance Law, § 23-65-301 et seq.; of the Arkansas Insurance Code. (c) A foreign insurer may transact business in this state without certificate of authority, for the purpose and to the extent only of investing its funds in Arkansas real estate or securities, by complying with the laws of this state relating to foreign business corporations in general. Such an insurer shall not be subject to any other provisions of the Arkansas Insurance Code. (d) (1) (A) The commissioner, in his or her reasonable discretion guided by the standards contained in this subsection and consistent with the purposes set forth in this subsection, may issue a special permit to make fixed-dollar life-only annuity agreements with donors to any duly organized domestic or foreign nonstock corporation or association conducted without profit and: (i) Engaged in active operation for at least five (5) years prior to receiving the permit solely in bona fide charitable, religious, missionary, educational, or philanthropic activities; or (ii) Not engaged in active operation solely in bona fide charitable, religious, missionary, educational, or philanthropic activities for five (5) years if the commissioner is reasonably satisfied that: (a) The entity is affiliated with a corporation or association that meets the requirements of subdivision (d)(1)(A)(i) of this section; and (b) An adequate level of management expertise is readily available to the entity requesting the permit. (B) The permit authorizes the corporation or association to receive gifts of money or other assets of monetary value that the commissioner may authorize for its agreement to pay an annuity to the donor or the donor's nominee and to carry out the annuity agreement. (C) Before making an annuity agreement under this subsection, every corporation or association shall file with the commissioner for his or her approval either: (i) A schedule of its maximum annuity rates that shall be computed on the basis of the annuity standard adopted by it for calculating its reserves; or (ii) A statement certifying that it adopts and will adhere to the annuity rates as published from time to time by the American Council on Gift Annuities or its successor until the corporation or association advises the commissioner to the contrary in writing and files a schedule of its new proposed maximum annuity rates for approval. (D) Filings and approvals required under this subsection shall be subject to the provisions of §§ 23-79-109 and 23-79-110 . (2) Upon entering an annuity agreement, a domestic corporation or association shall establish and maintain liabilities with respect to the annuity by one (1) of the following methods, using an amount: (A) Not less than the present value of future benefits payable to the donor as determined by the most recent method established by the Internal Revenue Service; (B) Determined by applying the method established for annuities under the Standard Valuation Law for Life Insurance and Annuities, § 23-84-101 et seq.; or (C) Equal to the aggregate values determined at the dates of contribution of all assets received from donors with respect to annuities for annuitants who are then living. (3) (A) Unless otherwise permitted by the commissioner, each corporation or association shall maintain a segregated account or accounts for its charitable gift annuities. (B) The segregated account or accounts shall be used solely to pay the charitable gift annuity obligations of the corporation or association. (C) If the commissioner finds the reserve established by a permittee inadequate at any time, the commissioner shall order the permittee to increase its reserve accordingly, or the commissioner may stipulate the reserving method for the permittee to rectify the reserve deficiency. (4) Each corporation or association, except those identified in subdivision (d)(5) of this section, shall maintain net admitted assets at least equal to the greater of: (A) The sum of its reserves on its outstanding agreements, all other liabilities, and a surplus of at least ten percent (10%) of the reserves; or (B) The amount of fifty thousand dollars ($50,000). (5) Each domestic corporation or association maintaining reserves in the manner described in subdivision (d)(2)(C) of this section shall maintain net admitted assets at least equal to the amount of the reserves plus all other outstanding liabilities. (6) In determining reserves, a deduction shall be made for all or any portion of an annuity risk that is reinsured by a life insurance company authorized to do business in this state. (7) The required admitted assets shall be invested: (A) Only in securities permitted by §§ 23-63-801 - 23-63-833 , 23-63-835 , 23-63-836 , 23-63-839 , and 23-63-840 ; or (B) In accordance with the prudent investor rule stated in §§ 24-2-610 - 24-2-619 . (8) No corporation or association organized under the laws of another state shall be permitted to make annuity agreements in this state unless it complies with all requirements of this subsection imposed upon domestic corporations or associations, except that a corporation or association organized under the laws of another state may invest its reserves and surplus funds in securities permitted by the laws of its state of domicile. (9) (A) No corporation or association shall make or issue in this state any annuity contract before obtaining a permit issued in accordance with the provisions of this subsection. (B) If after notice and hearing the commissioner finds that a corporation or association having a permit has failed to comply with the requirements of this subsection, the commissioner may revoke or suspend the permit or order the permittee to cease making new annuity contracts until it complies. (C) (i) All corporations or associations operating under this subsection shall file an annual financial statement of their operations and accounts and schedule of outstanding annuities with applicable reserves within one hundred eighty (180) days of the end of their fiscal year. (ii) The report shall be prepared by a certified public accountant in accordance with generally accepted accounting principles detailing the financial condition and status of the corporation or association as of the conclusion of its most recent fiscal year. (iii) Each domestic corporation or association investing assets in the manner described in subdivision (d)(7)(B) of this section shall file with the annual report: (a) A description of the organization's investment philosophy for charitable gift annuities and how the investments of the company are designed to meet future charitable gift annuity obligations; (b) A report from the organization identifying the members of the investment committee charged with making investment decisions regarding charitable gift annuity assets, including a description of each committee member's investment expertise; and (c) A certification of the board of directors of the corporation or association that attests that its investments and investment transactions match the organization's philosophy and meet the standards of the prudent investor rule stated in §§ 24-2-610 - 24-2-619 . (10) The commissioner may promulgate any rules and regulations the commissioner considers necessary or desirable to implement the provisions of this subsection. (e) (1) The commissioner shall promulgate rules to allow a city, town, municipality, or county of this state acting independently or in any combination pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., to obtain a charitable annuity permit for the purpose of establishing a charitable annuity program. (2) (A) The charitable annuity program shall permit any person or an entity to make voluntary and charitable donations to benefit the bona fide charitable, educational, and philanthropic programs, including without limitation libraries, museums, and governmentally owned hospitals, of a city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq. (B) The charitable donation may be made to assist the establishment or maintenance of streets, parks, children's playgrounds, libraries, museums, beautification projects, or any other charitable, educational, or philanthropic purpose of a city, town, municipality, or county. (3) The charitable annuity permit shall authorize the city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., to receive unconditional gifts of money and property and to receive gifts of money and property conditioned upon paying an annuity to the donor or the donor's nominee. (4) The rules of the commissioner to implement this subsection shall provide without limitation: (A) That the city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., has been actively involved in the operation of the public charitable, educational, or philanthropic activity for at least five (5) years prior to the issuance of the permit; (B) For the investment of the assets and maintenance of the liabilities and surplus of the charitable annuity program appropriate to funding the annuities; (C) That separate accounts be maintained solely for the benefit of annuity contract owners; (D) The prior approval of annuity contract forms and annuity rates by the commissioner; and (E) Annual financial reporting of a charitable annuity program of a city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., that has been granted a charitable annuity permit under this subsection. (f) The commissioner may punish a person that fails to meet the requirements of subsection (d) or subsection (e) of this section by: (1) Imposing a penalty of up to ten thousand dollars ($10,000); or (2) Suspending or revoking the charitable annuity permit and authority to operate under subsection (d) or subsection (e) of this section. Amended by Act 2013, No. 355,§ 3, eff. 8/16/2013. Acts 1959, No. 148, §§ 43-45; A.S.A. 1947, §§ 66-2201 -- 66-2203; Acts 1993, No. 1147, § 1806; 2003, No. 1099, § 1; 2005, No. 905, § 1; 2007, No. 496, § 8; 2009, No. 726, §§ 12 - 16.

(a) No person shall act as an insurer and no insurer shall transact insurance in this state unless authorized by a subsisting certificate of authority issued to it by the Insurance Commissioner except as to such transactions as are expressly otherwise provided for in the Arkansas Insurance Code.

(b) A certificate of authority shall not be required of an insurer with respect to the following: (1) Investigation, settlement, or litigation of claims under its policies lawfully written in Arkansas, or making change of beneficiary or other modifications of an insurance or annuity contract, or otherwise administering insurance or annuity contracts in force, or liquidation of assets and liabilities of the insurer, other than collection of new premiums, all as resulting from its former authorized operations in Arkansas; (2) Transactions subsequent to issuance of or relative to a policy covering only subjects of insurance not resident, located, or expressly to be performed in Arkansas at time of issuance, or covering property in course of transportation by land, air, or water to, from, or through Arkansas and including any preparation or storage incidental thereto, and lawfully solicited, written, or delivered outside Arkansas; or (3) Transactions pursuant to surplus lines coverages lawfully written under § 23-65-101 et seq.; the Unauthorized Insurers Process Act, § 23-65-201 et seq.; and the Surplus Lines Insurance Law, § 23-65-301 et seq.; of the Arkansas Insurance Code.

(1) Investigation, settlement, or litigation of claims under its policies lawfully written in Arkansas, or making change of beneficiary or other modifications of an insurance or annuity contract, or otherwise administering insurance or annuity contracts in force, or liquidation of assets and liabilities of the insurer, other than collection of new premiums, all as resulting from its former authorized operations in Arkansas;

(2) Transactions subsequent to issuance of or relative to a policy covering only subjects of insurance not resident, located, or expressly to be performed in Arkansas at time of issuance, or covering property in course of transportation by land, air, or water to, from, or through Arkansas and including any preparation or storage incidental thereto, and lawfully solicited, written, or delivered outside Arkansas; or

(3) Transactions pursuant to surplus lines coverages lawfully written under § 23-65-101 et seq.; the Unauthorized Insurers Process Act, § 23-65-201 et seq.; and the Surplus Lines Insurance Law, § 23-65-301 et seq.; of the Arkansas Insurance Code.

(c) A foreign insurer may transact business in this state without certificate of authority, for the purpose and to the extent only of investing its funds in Arkansas real estate or securities, by complying with the laws of this state relating to foreign business corporations in general. Such an insurer shall not be subject to any other provisions of the Arkansas Insurance Code.

(d) (1) (A) The commissioner, in his or her reasonable discretion guided by the standards contained in this subsection and consistent with the purposes set forth in this subsection, may issue a special permit to make fixed-dollar life-only annuity agreements with donors to any duly organized domestic or foreign nonstock corporation or association conducted without profit and: (i) Engaged in active operation for at least five (5) years prior to receiving the permit solely in bona fide charitable, religious, missionary, educational, or philanthropic activities; or (ii) Not engaged in active operation solely in bona fide charitable, religious, missionary, educational, or philanthropic activities for five (5) years if the commissioner is reasonably satisfied that: (a) The entity is affiliated with a corporation or association that meets the requirements of subdivision (d)(1)(A)(i) of this section; and (b) An adequate level of management expertise is readily available to the entity requesting the permit. (B) The permit authorizes the corporation or association to receive gifts of money or other assets of monetary value that the commissioner may authorize for its agreement to pay an annuity to the donor or the donor's nominee and to carry out the annuity agreement. (C) Before making an annuity agreement under this subsection, every corporation or association shall file with the commissioner for his or her approval either: (i) A schedule of its maximum annuity rates that shall be computed on the basis of the annuity standard adopted by it for calculating its reserves; or (ii) A statement certifying that it adopts and will adhere to the annuity rates as published from time to time by the American Council on Gift Annuities or its successor until the corporation or association advises the commissioner to the contrary in writing and files a schedule of its new proposed maximum annuity rates for approval. (D) Filings and approvals required under this subsection shall be subject to the provisions of §§ 23-79-109 and 23-79-110 . (2) Upon entering an annuity agreement, a domestic corporation or association shall establish and maintain liabilities with respect to the annuity by one (1) of the following methods, using an amount: (A) Not less than the present value of future benefits payable to the donor as determined by the most recent method established by the Internal Revenue Service; (B) Determined by applying the method established for annuities under the Standard Valuation Law for Life Insurance and Annuities, § 23-84-101 et seq.; or (C) Equal to the aggregate values determined at the dates of contribution of all assets received from donors with respect to annuities for annuitants who are then living. (3) (A) Unless otherwise permitted by the commissioner, each corporation or association shall maintain a segregated account or accounts for its charitable gift annuities. (B) The segregated account or accounts shall be used solely to pay the charitable gift annuity obligations of the corporation or association. (C) If the commissioner finds the reserve established by a permittee inadequate at any time, the commissioner shall order the permittee to increase its reserve accordingly, or the commissioner may stipulate the reserving method for the permittee to rectify the reserve deficiency. (4) Each corporation or association, except those identified in subdivision (d)(5) of this section, shall maintain net admitted assets at least equal to the greater of: (A) The sum of its reserves on its outstanding agreements, all other liabilities, and a surplus of at least ten percent (10%) of the reserves; or (B) The amount of fifty thousand dollars ($50,000). (5) Each domestic corporation or association maintaining reserves in the manner described in subdivision (d)(2)(C) of this section shall maintain net admitted assets at least equal to the amount of the reserves plus all other outstanding liabilities. (6) In determining reserves, a deduction shall be made for all or any portion of an annuity risk that is reinsured by a life insurance company authorized to do business in this state. (7) The required admitted assets shall be invested: (A) Only in securities permitted by §§ 23-63-801 - 23-63-833 , 23-63-835 , 23-63-836 , 23-63-839 , and 23-63-840 ; or (B) In accordance with the prudent investor rule stated in §§ 24-2-610 - 24-2-619 . (8) No corporation or association organized under the laws of another state shall be permitted to make annuity agreements in this state unless it complies with all requirements of this subsection imposed upon domestic corporations or associations, except that a corporation or association organized under the laws of another state may invest its reserves and surplus funds in securities permitted by the laws of its state of domicile. (9) (A) No corporation or association shall make or issue in this state any annuity contract before obtaining a permit issued in accordance with the provisions of this subsection. (B) If after notice and hearing the commissioner finds that a corporation or association having a permit has failed to comply with the requirements of this subsection, the commissioner may revoke or suspend the permit or order the permittee to cease making new annuity contracts until it complies. (C) (i) All corporations or associations operating under this subsection shall file an annual financial statement of their operations and accounts and schedule of outstanding annuities with applicable reserves within one hundred eighty (180) days of the end of their fiscal year. (ii) The report shall be prepared by a certified public accountant in accordance with generally accepted accounting principles detailing the financial condition and status of the corporation or association as of the conclusion of its most recent fiscal year. (iii) Each domestic corporation or association investing assets in the manner described in subdivision (d)(7)(B) of this section shall file with the annual report: (a) A description of the organization's investment philosophy for charitable gift annuities and how the investments of the company are designed to meet future charitable gift annuity obligations; (b) A report from the organization identifying the members of the investment committee charged with making investment decisions regarding charitable gift annuity assets, including a description of each committee member's investment expertise; and (c) A certification of the board of directors of the corporation or association that attests that its investments and investment transactions match the organization's philosophy and meet the standards of the prudent investor rule stated in §§ 24-2-610 - 24-2-619 . (10) The commissioner may promulgate any rules and regulations the commissioner considers necessary or desirable to implement the provisions of this subsection.

(1) (A) The commissioner, in his or her reasonable discretion guided by the standards contained in this subsection and consistent with the purposes set forth in this subsection, may issue a special permit to make fixed-dollar life-only annuity agreements with donors to any duly organized domestic or foreign nonstock corporation or association conducted without profit and: (i) Engaged in active operation for at least five (5) years prior to receiving the permit solely in bona fide charitable, religious, missionary, educational, or philanthropic activities; or (ii) Not engaged in active operation solely in bona fide charitable, religious, missionary, educational, or philanthropic activities for five (5) years if the commissioner is reasonably satisfied that: (a) The entity is affiliated with a corporation or association that meets the requirements of subdivision (d)(1)(A)(i) of this section; and (b) An adequate level of management expertise is readily available to the entity requesting the permit. (B) The permit authorizes the corporation or association to receive gifts of money or other assets of monetary value that the commissioner may authorize for its agreement to pay an annuity to the donor or the donor's nominee and to carry out the annuity agreement. (C) Before making an annuity agreement under this subsection, every corporation or association shall file with the commissioner for his or her approval either: (i) A schedule of its maximum annuity rates that shall be computed on the basis of the annuity standard adopted by it for calculating its reserves; or (ii) A statement certifying that it adopts and will adhere to the annuity rates as published from time to time by the American Council on Gift Annuities or its successor until the corporation or association advises the commissioner to the contrary in writing and files a schedule of its new proposed maximum annuity rates for approval. (D) Filings and approvals required under this subsection shall be subject to the provisions of §§ 23-79-109 and 23-79-110 .

(A) The commissioner, in his or her reasonable discretion guided by the standards contained in this subsection and consistent with the purposes set forth in this subsection, may issue a special permit to make fixed-dollar life-only annuity agreements with donors to any duly organized domestic or foreign nonstock corporation or association conducted without profit and: (i) Engaged in active operation for at least five (5) years prior to receiving the permit solely in bona fide charitable, religious, missionary, educational, or philanthropic activities; or (ii) Not engaged in active operation solely in bona fide charitable, religious, missionary, educational, or philanthropic activities for five (5) years if the commissioner is reasonably satisfied that: (a) The entity is affiliated with a corporation or association that meets the requirements of subdivision (d)(1)(A)(i) of this section; and (b) An adequate level of management expertise is readily available to the entity requesting the permit.

(i) Engaged in active operation for at least five (5) years prior to receiving the permit solely in bona fide charitable, religious, missionary, educational, or philanthropic activities; or

(ii) Not engaged in active operation solely in bona fide charitable, religious, missionary, educational, or philanthropic activities for five (5) years if the commissioner is reasonably satisfied that: (a) The entity is affiliated with a corporation or association that meets the requirements of subdivision (d)(1)(A)(i) of this section; and (b) An adequate level of management expertise is readily available to the entity requesting the permit.

(a) The entity is affiliated with a corporation or association that meets the requirements of subdivision (d)(1)(A)(i) of this section; and

(b) An adequate level of management expertise is readily available to the entity requesting the permit.

(B) The permit authorizes the corporation or association to receive gifts of money or other assets of monetary value that the commissioner may authorize for its agreement to pay an annuity to the donor or the donor's nominee and to carry out the annuity agreement.

(C) Before making an annuity agreement under this subsection, every corporation or association shall file with the commissioner for his or her approval either: (i) A schedule of its maximum annuity rates that shall be computed on the basis of the annuity standard adopted by it for calculating its reserves; or (ii) A statement certifying that it adopts and will adhere to the annuity rates as published from time to time by the American Council on Gift Annuities or its successor until the corporation or association advises the commissioner to the contrary in writing and files a schedule of its new proposed maximum annuity rates for approval.

(i) A schedule of its maximum annuity rates that shall be computed on the basis of the annuity standard adopted by it for calculating its reserves; or

(ii) A statement certifying that it adopts and will adhere to the annuity rates as published from time to time by the American Council on Gift Annuities or its successor until the corporation or association advises the commissioner to the contrary in writing and files a schedule of its new proposed maximum annuity rates for approval.

(D) Filings and approvals required under this subsection shall be subject to the provisions of §§ 23-79-109 and 23-79-110 .

(2) Upon entering an annuity agreement, a domestic corporation or association shall establish and maintain liabilities with respect to the annuity by one (1) of the following methods, using an amount: (A) Not less than the present value of future benefits payable to the donor as determined by the most recent method established by the Internal Revenue Service; (B) Determined by applying the method established for annuities under the Standard Valuation Law for Life Insurance and Annuities, § 23-84-101 et seq.; or (C) Equal to the aggregate values determined at the dates of contribution of all assets received from donors with respect to annuities for annuitants who are then living.

(A) Not less than the present value of future benefits payable to the donor as determined by the most recent method established by the Internal Revenue Service;

(B) Determined by applying the method established for annuities under the Standard Valuation Law for Life Insurance and Annuities, § 23-84-101 et seq.; or

(C) Equal to the aggregate values determined at the dates of contribution of all assets received from donors with respect to annuities for annuitants who are then living.

(3) (A) Unless otherwise permitted by the commissioner, each corporation or association shall maintain a segregated account or accounts for its charitable gift annuities. (B) The segregated account or accounts shall be used solely to pay the charitable gift annuity obligations of the corporation or association. (C) If the commissioner finds the reserve established by a permittee inadequate at any time, the commissioner shall order the permittee to increase its reserve accordingly, or the commissioner may stipulate the reserving method for the permittee to rectify the reserve deficiency.

(A) Unless otherwise permitted by the commissioner, each corporation or association shall maintain a segregated account or accounts for its charitable gift annuities.

(B) The segregated account or accounts shall be used solely to pay the charitable gift annuity obligations of the corporation or association.

(C) If the commissioner finds the reserve established by a permittee inadequate at any time, the commissioner shall order the permittee to increase its reserve accordingly, or the commissioner may stipulate the reserving method for the permittee to rectify the reserve deficiency.

(4) Each corporation or association, except those identified in subdivision (d)(5) of this section, shall maintain net admitted assets at least equal to the greater of: (A) The sum of its reserves on its outstanding agreements, all other liabilities, and a surplus of at least ten percent (10%) of the reserves; or (B) The amount of fifty thousand dollars ($50,000).

(A) The sum of its reserves on its outstanding agreements, all other liabilities, and a surplus of at least ten percent (10%) of the reserves; or

(B) The amount of fifty thousand dollars ($50,000).

(5) Each domestic corporation or association maintaining reserves in the manner described in subdivision (d)(2)(C) of this section shall maintain net admitted assets at least equal to the amount of the reserves plus all other outstanding liabilities.

(6) In determining reserves, a deduction shall be made for all or any portion of an annuity risk that is reinsured by a life insurance company authorized to do business in this state.

(7) The required admitted assets shall be invested: (A) Only in securities permitted by §§ 23-63-801 - 23-63-833 , 23-63-835 , 23-63-836 , 23-63-839 , and 23-63-840 ; or (B) In accordance with the prudent investor rule stated in §§ 24-2-610 - 24-2-619 .

(A) Only in securities permitted by §§ 23-63-801 - 23-63-833 , 23-63-835 , 23-63-836 , 23-63-839 , and 23-63-840 ; or

(B) In accordance with the prudent investor rule stated in §§ 24-2-610 - 24-2-619 .

(8) No corporation or association organized under the laws of another state shall be permitted to make annuity agreements in this state unless it complies with all requirements of this subsection imposed upon domestic corporations or associations, except that a corporation or association organized under the laws of another state may invest its reserves and surplus funds in securities permitted by the laws of its state of domicile.

(9) (A) No corporation or association shall make or issue in this state any annuity contract before obtaining a permit issued in accordance with the provisions of this subsection. (B) If after notice and hearing the commissioner finds that a corporation or association having a permit has failed to comply with the requirements of this subsection, the commissioner may revoke or suspend the permit or order the permittee to cease making new annuity contracts until it complies. (C) (i) All corporations or associations operating under this subsection shall file an annual financial statement of their operations and accounts and schedule of outstanding annuities with applicable reserves within one hundred eighty (180) days of the end of their fiscal year. (ii) The report shall be prepared by a certified public accountant in accordance with generally accepted accounting principles detailing the financial condition and status of the corporation or association as of the conclusion of its most recent fiscal year. (iii) Each domestic corporation or association investing assets in the manner described in subdivision (d)(7)(B) of this section shall file with the annual report: (a) A description of the organization's investment philosophy for charitable gift annuities and how the investments of the company are designed to meet future charitable gift annuity obligations; (b) A report from the organization identifying the members of the investment committee charged with making investment decisions regarding charitable gift annuity assets, including a description of each committee member's investment expertise; and (c) A certification of the board of directors of the corporation or association that attests that its investments and investment transactions match the organization's philosophy and meet the standards of the prudent investor rule stated in §§ 24-2-610 - 24-2-619 .

(A) No corporation or association shall make or issue in this state any annuity contract before obtaining a permit issued in accordance with the provisions of this subsection.

(B) If after notice and hearing the commissioner finds that a corporation or association having a permit has failed to comply with the requirements of this subsection, the commissioner may revoke or suspend the permit or order the permittee to cease making new annuity contracts until it complies.

(C) (i) All corporations or associations operating under this subsection shall file an annual financial statement of their operations and accounts and schedule of outstanding annuities with applicable reserves within one hundred eighty (180) days of the end of their fiscal year. (ii) The report shall be prepared by a certified public accountant in accordance with generally accepted accounting principles detailing the financial condition and status of the corporation or association as of the conclusion of its most recent fiscal year. (iii) Each domestic corporation or association investing assets in the manner described in subdivision (d)(7)(B) of this section shall file with the annual report: (a) A description of the organization's investment philosophy for charitable gift annuities and how the investments of the company are designed to meet future charitable gift annuity obligations; (b) A report from the organization identifying the members of the investment committee charged with making investment decisions regarding charitable gift annuity assets, including a description of each committee member's investment expertise; and (c) A certification of the board of directors of the corporation or association that attests that its investments and investment transactions match the organization's philosophy and meet the standards of the prudent investor rule stated in §§ 24-2-610 - 24-2-619 .

(i) All corporations or associations operating under this subsection shall file an annual financial statement of their operations and accounts and schedule of outstanding annuities with applicable reserves within one hundred eighty (180) days of the end of their fiscal year.

(ii) The report shall be prepared by a certified public accountant in accordance with generally accepted accounting principles detailing the financial condition and status of the corporation or association as of the conclusion of its most recent fiscal year.

(iii) Each domestic corporation or association investing assets in the manner described in subdivision (d)(7)(B) of this section shall file with the annual report: (a) A description of the organization's investment philosophy for charitable gift annuities and how the investments of the company are designed to meet future charitable gift annuity obligations; (b) A report from the organization identifying the members of the investment committee charged with making investment decisions regarding charitable gift annuity assets, including a description of each committee member's investment expertise; and (c) A certification of the board of directors of the corporation or association that attests that its investments and investment transactions match the organization's philosophy and meet the standards of the prudent investor rule stated in §§ 24-2-610 - 24-2-619 .

(a) A description of the organization's investment philosophy for charitable gift annuities and how the investments of the company are designed to meet future charitable gift annuity obligations;

(b) A report from the organization identifying the members of the investment committee charged with making investment decisions regarding charitable gift annuity assets, including a description of each committee member's investment expertise; and

(c) A certification of the board of directors of the corporation or association that attests that its investments and investment transactions match the organization's philosophy and meet the standards of the prudent investor rule stated in §§ 24-2-610 - 24-2-619 .

(10) The commissioner may promulgate any rules and regulations the commissioner considers necessary or desirable to implement the provisions of this subsection.

(e) (1) The commissioner shall promulgate rules to allow a city, town, municipality, or county of this state acting independently or in any combination pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., to obtain a charitable annuity permit for the purpose of establishing a charitable annuity program. (2) (A) The charitable annuity program shall permit any person or an entity to make voluntary and charitable donations to benefit the bona fide charitable, educational, and philanthropic programs, including without limitation libraries, museums, and governmentally owned hospitals, of a city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq. (B) The charitable donation may be made to assist the establishment or maintenance of streets, parks, children's playgrounds, libraries, museums, beautification projects, or any other charitable, educational, or philanthropic purpose of a city, town, municipality, or county. (3) The charitable annuity permit shall authorize the city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., to receive unconditional gifts of money and property and to receive gifts of money and property conditioned upon paying an annuity to the donor or the donor's nominee. (4) The rules of the commissioner to implement this subsection shall provide without limitation: (A) That the city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., has been actively involved in the operation of the public charitable, educational, or philanthropic activity for at least five (5) years prior to the issuance of the permit; (B) For the investment of the assets and maintenance of the liabilities and surplus of the charitable annuity program appropriate to funding the annuities; (C) That separate accounts be maintained solely for the benefit of annuity contract owners; (D) The prior approval of annuity contract forms and annuity rates by the commissioner; and (E) Annual financial reporting of a charitable annuity program of a city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., that has been granted a charitable annuity permit under this subsection.

(1) The commissioner shall promulgate rules to allow a city, town, municipality, or county of this state acting independently or in any combination pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., to obtain a charitable annuity permit for the purpose of establishing a charitable annuity program.

(2) (A) The charitable annuity program shall permit any person or an entity to make voluntary and charitable donations to benefit the bona fide charitable, educational, and philanthropic programs, including without limitation libraries, museums, and governmentally owned hospitals, of a city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq. (B) The charitable donation may be made to assist the establishment or maintenance of streets, parks, children's playgrounds, libraries, museums, beautification projects, or any other charitable, educational, or philanthropic purpose of a city, town, municipality, or county.

(A) The charitable annuity program shall permit any person or an entity to make voluntary and charitable donations to benefit the bona fide charitable, educational, and philanthropic programs, including without limitation libraries, museums, and governmentally owned hospitals, of a city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq.

(B) The charitable donation may be made to assist the establishment or maintenance of streets, parks, children's playgrounds, libraries, museums, beautification projects, or any other charitable, educational, or philanthropic purpose of a city, town, municipality, or county.

(3) The charitable annuity permit shall authorize the city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., to receive unconditional gifts of money and property and to receive gifts of money and property conditioned upon paying an annuity to the donor or the donor's nominee.

(4) The rules of the commissioner to implement this subsection shall provide without limitation: (A) That the city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., has been actively involved in the operation of the public charitable, educational, or philanthropic activity for at least five (5) years prior to the issuance of the permit; (B) For the investment of the assets and maintenance of the liabilities and surplus of the charitable annuity program appropriate to funding the annuities; (C) That separate accounts be maintained solely for the benefit of annuity contract owners; (D) The prior approval of annuity contract forms and annuity rates by the commissioner; and (E) Annual financial reporting of a charitable annuity program of a city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., that has been granted a charitable annuity permit under this subsection.

(A) That the city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., has been actively involved in the operation of the public charitable, educational, or philanthropic activity for at least five (5) years prior to the issuance of the permit;

(B) For the investment of the assets and maintenance of the liabilities and surplus of the charitable annuity program appropriate to funding the annuities;

(C) That separate accounts be maintained solely for the benefit of annuity contract owners;

(D) The prior approval of annuity contract forms and annuity rates by the commissioner; and

(E) Annual financial reporting of a charitable annuity program of a city, town, municipality, or county acting alone or pursuant to an interlocal cooperation agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., that has been granted a charitable annuity permit under this subsection.

(f) The commissioner may punish a person that fails to meet the requirements of subsection (d) or subsection (e) of this section by: (1) Imposing a penalty of up to ten thousand dollars ($10,000); or (2) Suspending or revoking the charitable annuity permit and authority to operate under subsection (d) or subsection (e) of this section.

(1) Imposing a penalty of up to ten thousand dollars ($10,000); or

(2) Suspending or revoking the charitable annuity permit and authority to operate under subsection (d) or subsection (e) of this section.

Amended by Act 2013, No. 355,§ 3, eff. 8/16/2013.

Acts 1959, No. 148, §§ 43-45; A.S.A. 1947, §§ 66-2201 -- 66-2203; Acts 1993, No. 1147, § 1806; 2003, No. 1099, § 1; 2005, No. 905, § 1; 2007, No. 496, § 8; 2009, No. 726, §§ 12 - 16.
Ark. Code Ann. § 23-68-135 — AR Code / Title 23 / Chapter 68 / Section 23-68-135
Early distribution - Definition
Status: in_force

(a) As used in this section, "distributable asset" means the general assets of an insurer in a liquidation estate except: (1) Amounts reserved to the extent necessary and appropriate under § 23-68-126(b)(1) as the expenses of the liquidation through and after its closing; and (2) Amounts reserved to the extent necessary for distribution on claims other than the claims of affected guaranty associations in the priority class of claims under § 23-68-126(b)(2) . (b) (1) An early payment of distributable assets to a guaranty association shall be made: (A) As frequently as possible after entry of a liquidation order if distributable assets are available, but at least annually; and (B) In amounts consistent with this section. (2) An amount distributed to a guaranty association under this section is accounted for as an advance against distributions under § 23-68-126 . (c) (1) Where sufficient distributable assets are available, amounts advanced need not be limited to the claims and expenses paid to date by the guaranty associations. (2) However, the liquidator shall not distribute distributable assets to the guaranty associations in excess of the anticipated entire claims of the guaranty associations falling within the priority classes of claims established in § 23-68-126(b)(1) and (2) . (d) Within one hundred twenty (120) days after the entry of a liquidation order and at least annually thereafter, the liquidator shall submit to the court: (1) A financial statement, including: (A) The assets and liabilities of the insurer; (B) Any change in the assets and liabilities of the insurer; (C) The income and expenses of the insurer; and (D) All funds received or disbursed by the receiver in the liquidation estate during the reporting period; (2) A report indicating whether or not distributable assets are available based on the financial statement; and (3) (A) If distributable assets are available, a request for court approval to make early access payments of the distributable assets available to affected guaranty associations out of the general assets of the insurer. (B) The liquidator may apply to the court to make early access payments more frequently than annually based on additional financial information or the recovery of material assets. (e) Within sixty (60) days after approval by the court under subdivision (d)(3) of this section, the liquidator shall make early access payments to a guaranty association as indicated in the approved applications. (f) (1) Notice of each application for early access payments or any report required under this section shall be given to guaranty associations having obligations arising under this section. (2) At least thirty (30) days before filing a request with the court under subdivision (d)(3) of this section, the liquidator shall provide notice to guaranty associations together with a complete copy of the request. (3) A guaranty association may: (A) Request additional information from the liquidator, and the liquidator shall not unreasonably deny the request; and (B) Object to a request for distribution or any report filed by the liquidator under this section. (g) In a request for early access payments, the liquidator, at a minimum and based on the information available to the liquidator at the time, shall provide: (1) The amount reserved for the expenses of the entire liquidation through and after its closure and for distribution on claims in the priority class of claims under § 23-68-126(b)(1) and (2) ; and (2) The calculation of distributable assets and the amount and method of equitable allocation of early access payments to guaranty associations. (h) Each guaranty association that receives any payments pursuant to this section agrees, upon depositing the payment into any account to its benefit, to return to the liquidator any amount of these payments that may be required to pay claims of secured creditors and claims falling within the priority classes of claims established in § 23-68-126(b)(1) and (2) . (i) A bond is not required of any guaranty association under this section. (j) Without the consent of affected guaranty associations or an order of the court, the liquidator shall not offset the amount to be distributed to a guaranty association by the amount of a special deposit or other deposit or asset of the insurer held in another state unless the guaranty association has received the deposit or asset. Amended by Act 2015, No. 1164,§ 3, eff. 7/22/2015. Added by Act 2013, No. 1327,§ 1, eff. 8/16/2013.

(a) As used in this section, "distributable asset" means the general assets of an insurer in a liquidation estate except: (1) Amounts reserved to the extent necessary and appropriate under § 23-68-126(b)(1) as the expenses of the liquidation through and after its closing; and (2) Amounts reserved to the extent necessary for distribution on claims other than the claims of affected guaranty associations in the priority class of claims under § 23-68-126(b)(2) .

(1) Amounts reserved to the extent necessary and appropriate under § 23-68-126(b)(1) as the expenses of the liquidation through and after its closing; and

(2) Amounts reserved to the extent necessary for distribution on claims other than the claims of affected guaranty associations in the priority class of claims under § 23-68-126(b)(2) .

(b) (1) An early payment of distributable assets to a guaranty association shall be made: (A) As frequently as possible after entry of a liquidation order if distributable assets are available, but at least annually; and (B) In amounts consistent with this section. (2) An amount distributed to a guaranty association under this section is accounted for as an advance against distributions under § 23-68-126 .

(1) An early payment of distributable assets to a guaranty association shall be made: (A) As frequently as possible after entry of a liquidation order if distributable assets are available, but at least annually; and (B) In amounts consistent with this section.

(A) As frequently as possible after entry of a liquidation order if distributable assets are available, but at least annually; and

(B) In amounts consistent with this section.

(2) An amount distributed to a guaranty association under this section is accounted for as an advance against distributions under § 23-68-126 .

(c) (1) Where sufficient distributable assets are available, amounts advanced need not be limited to the claims and expenses paid to date by the guaranty associations. (2) However, the liquidator shall not distribute distributable assets to the guaranty associations in excess of the anticipated entire claims of the guaranty associations falling within the priority classes of claims established in § 23-68-126(b)(1) and (2) .

(1) Where sufficient distributable assets are available, amounts advanced need not be limited to the claims and expenses paid to date by the guaranty associations.

(2) However, the liquidator shall not distribute distributable assets to the guaranty associations in excess of the anticipated entire claims of the guaranty associations falling within the priority classes of claims established in § 23-68-126(b)(1) and (2) .

(d) Within one hundred twenty (120) days after the entry of a liquidation order and at least annually thereafter, the liquidator shall submit to the court: (1) A financial statement, including: (A) The assets and liabilities of the insurer; (B) Any change in the assets and liabilities of the insurer; (C) The income and expenses of the insurer; and (D) All funds received or disbursed by the receiver in the liquidation estate during the reporting period; (2) A report indicating whether or not distributable assets are available based on the financial statement; and (3) (A) If distributable assets are available, a request for court approval to make early access payments of the distributable assets available to affected guaranty associations out of the general assets of the insurer. (B) The liquidator may apply to the court to make early access payments more frequently than annually based on additional financial information or the recovery of material assets.

(1) A financial statement, including: (A) The assets and liabilities of the insurer; (B) Any change in the assets and liabilities of the insurer; (C) The income and expenses of the insurer; and (D) All funds received or disbursed by the receiver in the liquidation estate during the reporting period;

(A) The assets and liabilities of the insurer;

(B) Any change in the assets and liabilities of the insurer;

(C) The income and expenses of the insurer; and

(D) All funds received or disbursed by the receiver in the liquidation estate during the reporting period;

(2) A report indicating whether or not distributable assets are available based on the financial statement; and

(3) (A) If distributable assets are available, a request for court approval to make early access payments of the distributable assets available to affected guaranty associations out of the general assets of the insurer. (B) The liquidator may apply to the court to make early access payments more frequently than annually based on additional financial information or the recovery of material assets.

(A) If distributable assets are available, a request for court approval to make early access payments of the distributable assets available to affected guaranty associations out of the general assets of the insurer.

(B) The liquidator may apply to the court to make early access payments more frequently than annually based on additional financial information or the recovery of material assets.

(e) Within sixty (60) days after approval by the court under subdivision (d)(3) of this section, the liquidator shall make early access payments to a guaranty association as indicated in the approved applications.

(f) (1) Notice of each application for early access payments or any report required under this section shall be given to guaranty associations having obligations arising under this section. (2) At least thirty (30) days before filing a request with the court under subdivision (d)(3) of this section, the liquidator shall provide notice to guaranty associations together with a complete copy of the request. (3) A guaranty association may: (A) Request additional information from the liquidator, and the liquidator shall not unreasonably deny the request; and (B) Object to a request for distribution or any report filed by the liquidator under this section.

(1) Notice of each application for early access payments or any report required under this section shall be given to guaranty associations having obligations arising under this section.

(2) At least thirty (30) days before filing a request with the court under subdivision (d)(3) of this section, the liquidator shall provide notice to guaranty associations together with a complete copy of the request.

(3) A guaranty association may: (A) Request additional information from the liquidator, and the liquidator shall not unreasonably deny the request; and (B) Object to a request for distribution or any report filed by the liquidator under this section.

(A) Request additional information from the liquidator, and the liquidator shall not unreasonably deny the request; and

(B) Object to a request for distribution or any report filed by the liquidator under this section.

(g) In a request for early access payments, the liquidator, at a minimum and based on the information available to the liquidator at the time, shall provide: (1) The amount reserved for the expenses of the entire liquidation through and after its closure and for distribution on claims in the priority class of claims under § 23-68-126(b)(1) and (2) ; and (2) The calculation of distributable assets and the amount and method of equitable allocation of early access payments to guaranty associations.

(1) The amount reserved for the expenses of the entire liquidation through and after its closure and for distribution on claims in the priority class of claims under § 23-68-126(b)(1) and (2) ; and

(2) The calculation of distributable assets and the amount and method of equitable allocation of early access payments to guaranty associations.

(h) Each guaranty association that receives any payments pursuant to this section agrees, upon depositing the payment into any account to its benefit, to return to the liquidator any amount of these payments that may be required to pay claims of secured creditors and claims falling within the priority classes of claims established in § 23-68-126(b)(1) and (2) .

(i) A bond is not required of any guaranty association under this section.

(j) Without the consent of affected guaranty associations or an order of the court, the liquidator shall not offset the amount to be distributed to a guaranty association by the amount of a special deposit or other deposit or asset of the insurer held in another state unless the guaranty association has received the deposit or asset.

Amended by Act 2015, No. 1164,§ 3, eff. 7/22/2015.

Added by Act 2013, No. 1327,§ 1, eff. 8/16/2013.
Ark. Code Ann. § 23-69-509 — AR Code / Title 23 / Chapter 69 / Subchapter 5 / Section 23-69-509
Insurance business transfer plan - Petition for court approval - Implementation order
Status: in_force

(a) (1) Within thirty (30) days after notice from the Insurance Commissioner that an applicant may proceed with filing the insurance business transfer plan with the Pulaski County Circuit Court, the applicant shall petition the court for approval of the insurance business transfer plan. (2) Upon written request by the applicant, the commissioner may extend the period for filing a petition with the court for an additional thirty (30) days. (b) An applicant shall inform the court of the reason for the applicant's petition to the court to approve the insurance business transfer plan on the basis that no adverse material impact to policyholders or claimants affected by the proposed insurance business transfer will result. (c) (1) A petition shall be in the form of a verified petition to the court for implementation of the insurance business transfer plan through the court. (2) The petition shall include the insurance business transfer plan and shall identify any documents and witnesses that the applicant intends to present at a hearing regarding the petition. (d) (1) The commissioner shall be a party to the proceedings before the court concerning the petition and shall be served with copies of all filings according to the Arkansas Rules of Civil Procedure. (2) The position of the commissioner in the proceeding shall not be limited by his or her initial review of the insurance business transfer plan. (e) (1) Following the filing of the petition, an applicant shall file a motion for a scheduling order setting a hearing on the petition. (2) (A) Within fifteen (15) days after receipt of the scheduling order, the applicant shall cause notice of the hearing to be provided according to § 23-69-505 . (B) Following the date of distribution of the notice, there shall be a comment period of sixty (60) days. (f) The notice to policyholders shall provide: (1) The date and time of the approval hearing; (2) The name, address, and telephone number of the assuming insurer and transferring insurer; (3) A statement that a policyholder may comment on or object to the transfer and novation; (4) The procedures and deadline for submitting comments on or objections to the insurance business transfer plan; (5) A summary of any effect that the transfer and novation will have on the policyholder's rights; (6) A statement that the assuming insurer is authorized to assume the subject business and that court approval of the insurance business transfer plan shall extinguish all rights of policyholders under policies that are part of the subject business against the transferring insurer; (7) A statement that a policyholder does not have the opportunity to opt out of or otherwise reject the transfer and novation; (8) Contact information for the State Insurance Department for the policyholder to obtain further information; and (9) (A) Information on how to access an electronic copy of the insurance business transfer plan. (B) If a policyholder is unable to readily access an electronic copy of the insurance business transfer plan, the applicant shall provide a hard copy of the insurance business transfer plan to the policyholder by first class mail. (g) (1) A person, including his, her, or its legal representative, who or that considers himself, herself, or itself to be adversely affected may present evidence or comments to the court at the approval hearing. (2) However, the evidence or comments shall not confer standing on any person. (3) A person participating in the approval hearing shall follow the process established by the court and shall be responsible for his, her, or its own costs and attorney's fees. (h) After the comment period described in subdivision (e)(2)(B) of this section has ended, the insurance business transfer plan shall be presented by the applicant for approval by the court. (i) At any time before the court issues an order approving the insurance business transfer plan, the applicant may withdraw the insurance business transfer plan without prejudice. (j) (1) If the court finds that the implementation of the insurance business transfer plan would not have an adverse material impact on the interests of policyholders or claimants that are part of the subject business, the court shall enter an implementation order. (2) The implementation order shall: (A) Order implementation of the insurance business transfer plan; (B) Order a transfer and novation with respect to all policyholders or reinsureds and their respective policies and reinsurance agreements under the subject business, including: (i) The extinguishment of all rights of policyholders under policies that are part of the subject business against the transferring insurer; (ii) Providing that the transferring insurer shall have no further rights, obligations, or liabilities with respect to such policies; and (iii) Providing that the assuming insurer shall have all such rights, obligations, and liabilities as if the assuming insurer, instead of the transferring insurer, were the original insurer of such policies; (C) Release the transferring insurer from all obligations or liabilities under policies that are part of the subject business; (D) (i) Authorize and order the transfer of property or liabilities, including without limitation the ceded reinsurance of transferred policies and contracts on the subject business. (ii) The subject business shall vest in and become a liability of the assuming insurer; (E) Order that the applicant provide notice of the transfer and novation according to § 23-69-505 ; and (F) Make any orders with respect to incidental, consequential, and supplementary matters as are necessary to assure the insurance business transfer plan is fully and effectively executed. (k) If the court finds that the insurance business transfer plan should not be approved, the court by its order may: (1) Deny the petition; or (2) Provide the applicant leave to file an amended insurance business transfer plan and petition. (l) This section does not affect the right of appeal for any party. Added by Act 2021, No. 1018,§ 1, eff. 7/28/2021.

(a) (1) Within thirty (30) days after notice from the Insurance Commissioner that an applicant may proceed with filing the insurance business transfer plan with the Pulaski County Circuit Court, the applicant shall petition the court for approval of the insurance business transfer plan. (2) Upon written request by the applicant, the commissioner may extend the period for filing a petition with the court for an additional thirty (30) days.

(1) Within thirty (30) days after notice from the Insurance Commissioner that an applicant may proceed with filing the insurance business transfer plan with the Pulaski County Circuit Court, the applicant shall petition the court for approval of the insurance business transfer plan.

(2) Upon written request by the applicant, the commissioner may extend the period for filing a petition with the court for an additional thirty (30) days.

(b) An applicant shall inform the court of the reason for the applicant's petition to the court to approve the insurance business transfer plan on the basis that no adverse material impact to policyholders or claimants affected by the proposed insurance business transfer will result.

(c) (1) A petition shall be in the form of a verified petition to the court for implementation of the insurance business transfer plan through the court. (2) The petition shall include the insurance business transfer plan and shall identify any documents and witnesses that the applicant intends to present at a hearing regarding the petition.

(1) A petition shall be in the form of a verified petition to the court for implementation of the insurance business transfer plan through the court.

(2) The petition shall include the insurance business transfer plan and shall identify any documents and witnesses that the applicant intends to present at a hearing regarding the petition.

(d) (1) The commissioner shall be a party to the proceedings before the court concerning the petition and shall be served with copies of all filings according to the Arkansas Rules of Civil Procedure. (2) The position of the commissioner in the proceeding shall not be limited by his or her initial review of the insurance business transfer plan.

(1) The commissioner shall be a party to the proceedings before the court concerning the petition and shall be served with copies of all filings according to the Arkansas Rules of Civil Procedure.

(2) The position of the commissioner in the proceeding shall not be limited by his or her initial review of the insurance business transfer plan.

(e) (1) Following the filing of the petition, an applicant shall file a motion for a scheduling order setting a hearing on the petition. (2) (A) Within fifteen (15) days after receipt of the scheduling order, the applicant shall cause notice of the hearing to be provided according to § 23-69-505 . (B) Following the date of distribution of the notice, there shall be a comment period of sixty (60) days.

(1) Following the filing of the petition, an applicant shall file a motion for a scheduling order setting a hearing on the petition.

(2) (A) Within fifteen (15) days after receipt of the scheduling order, the applicant shall cause notice of the hearing to be provided according to § 23-69-505 . (B) Following the date of distribution of the notice, there shall be a comment period of sixty (60) days.

(A) Within fifteen (15) days after receipt of the scheduling order, the applicant shall cause notice of the hearing to be provided according to § 23-69-505 .

(B) Following the date of distribution of the notice, there shall be a comment period of sixty (60) days.

(f) The notice to policyholders shall provide: (1) The date and time of the approval hearing; (2) The name, address, and telephone number of the assuming insurer and transferring insurer; (3) A statement that a policyholder may comment on or object to the transfer and novation; (4) The procedures and deadline for submitting comments on or objections to the insurance business transfer plan; (5) A summary of any effect that the transfer and novation will have on the policyholder's rights; (6) A statement that the assuming insurer is authorized to assume the subject business and that court approval of the insurance business transfer plan shall extinguish all rights of policyholders under policies that are part of the subject business against the transferring insurer; (7) A statement that a policyholder does not have the opportunity to opt out of or otherwise reject the transfer and novation; (8) Contact information for the State Insurance Department for the policyholder to obtain further information; and (9) (A) Information on how to access an electronic copy of the insurance business transfer plan. (B) If a policyholder is unable to readily access an electronic copy of the insurance business transfer plan, the applicant shall provide a hard copy of the insurance business transfer plan to the policyholder by first class mail.

(1) The date and time of the approval hearing;

(2) The name, address, and telephone number of the assuming insurer and transferring insurer;

(3) A statement that a policyholder may comment on or object to the transfer and novation;

(4) The procedures and deadline for submitting comments on or objections to the insurance business transfer plan;

(5) A summary of any effect that the transfer and novation will have on the policyholder's rights;

(6) A statement that the assuming insurer is authorized to assume the subject business and that court approval of the insurance business transfer plan shall extinguish all rights of policyholders under policies that are part of the subject business against the transferring insurer;

(7) A statement that a policyholder does not have the opportunity to opt out of or otherwise reject the transfer and novation;

(8) Contact information for the State Insurance Department for the policyholder to obtain further information; and

(9) (A) Information on how to access an electronic copy of the insurance business transfer plan. (B) If a policyholder is unable to readily access an electronic copy of the insurance business transfer plan, the applicant shall provide a hard copy of the insurance business transfer plan to the policyholder by first class mail.

(A) Information on how to access an electronic copy of the insurance business transfer plan.

(B) If a policyholder is unable to readily access an electronic copy of the insurance business transfer plan, the applicant shall provide a hard copy of the insurance business transfer plan to the policyholder by first class mail.

(g) (1) A person, including his, her, or its legal representative, who or that considers himself, herself, or itself to be adversely affected may present evidence or comments to the court at the approval hearing. (2) However, the evidence or comments shall not confer standing on any person. (3) A person participating in the approval hearing shall follow the process established by the court and shall be responsible for his, her, or its own costs and attorney's fees.

(1) A person, including his, her, or its legal representative, who or that considers himself, herself, or itself to be adversely affected may present evidence or comments to the court at the approval hearing.

(2) However, the evidence or comments shall not confer standing on any person.

(3) A person participating in the approval hearing shall follow the process established by the court and shall be responsible for his, her, or its own costs and attorney's fees.

(h) After the comment period described in subdivision (e)(2)(B) of this section has ended, the insurance business transfer plan shall be presented by the applicant for approval by the court.

(i) At any time before the court issues an order approving the insurance business transfer plan, the applicant may withdraw the insurance business transfer plan without prejudice.

(j) (1) If the court finds that the implementation of the insurance business transfer plan would not have an adverse material impact on the interests of policyholders or claimants that are part of the subject business, the court shall enter an implementation order. (2) The implementation order shall: (A) Order implementation of the insurance business transfer plan; (B) Order a transfer and novation with respect to all policyholders or reinsureds and their respective policies and reinsurance agreements under the subject business, including: (i) The extinguishment of all rights of policyholders under policies that are part of the subject business against the transferring insurer; (ii) Providing that the transferring insurer shall have no further rights, obligations, or liabilities with respect to such policies; and (iii) Providing that the assuming insurer shall have all such rights, obligations, and liabilities as if the assuming insurer, instead of the transferring insurer, were the original insurer of such policies; (C) Release the transferring insurer from all obligations or liabilities under policies that are part of the subject business; (D) (i) Authorize and order the transfer of property or liabilities, including without limitation the ceded reinsurance of transferred policies and contracts on the subject business. (ii) The subject business shall vest in and become a liability of the assuming insurer; (E) Order that the applicant provide notice of the transfer and novation according to § 23-69-505 ; and (F) Make any orders with respect to incidental, consequential, and supplementary matters as are necessary to assure the insurance business transfer plan is fully and effectively executed.

(1) If the court finds that the implementation of the insurance business transfer plan would not have an adverse material impact on the interests of policyholders or claimants that are part of the subject business, the court shall enter an implementation order.

(2) The implementation order shall: (A) Order implementation of the insurance business transfer plan; (B) Order a transfer and novation with respect to all policyholders or reinsureds and their respective policies and reinsurance agreements under the subject business, including: (i) The extinguishment of all rights of policyholders under policies that are part of the subject business against the transferring insurer; (ii) Providing that the transferring insurer shall have no further rights, obligations, or liabilities with respect to such policies; and (iii) Providing that the assuming insurer shall have all such rights, obligations, and liabilities as if the assuming insurer, instead of the transferring insurer, were the original insurer of such policies; (C) Release the transferring insurer from all obligations or liabilities under policies that are part of the subject business; (D) (i) Authorize and order the transfer of property or liabilities, including without limitation the ceded reinsurance of transferred policies and contracts on the subject business. (ii) The subject business shall vest in and become a liability of the assuming insurer; (E) Order that the applicant provide notice of the transfer and novation according to § 23-69-505 ; and (F) Make any orders with respect to incidental, consequential, and supplementary matters as are necessary to assure the insurance business transfer plan is fully and effectively executed.

(A) Order implementation of the insurance business transfer plan;

(B) Order a transfer and novation with respect to all policyholders or reinsureds and their respective policies and reinsurance agreements under the subject business, including: (i) The extinguishment of all rights of policyholders under policies that are part of the subject business against the transferring insurer; (ii) Providing that the transferring insurer shall have no further rights, obligations, or liabilities with respect to such policies; and (iii) Providing that the assuming insurer shall have all such rights, obligations, and liabilities as if the assuming insurer, instead of the transferring insurer, were the original insurer of such policies;

(i) The extinguishment of all rights of policyholders under policies that are part of the subject business against the transferring insurer;

(ii) Providing that the transferring insurer shall have no further rights, obligations, or liabilities with respect to such policies; and

(iii) Providing that the assuming insurer shall have all such rights, obligations, and liabilities as if the assuming insurer, instead of the transferring insurer, were the original insurer of such policies;

(C) Release the transferring insurer from all obligations or liabilities under policies that are part of the subject business;

(D) (i) Authorize and order the transfer of property or liabilities, including without limitation the ceded reinsurance of transferred policies and contracts on the subject business. (ii) The subject business shall vest in and become a liability of the assuming insurer;

(i) Authorize and order the transfer of property or liabilities, including without limitation the ceded reinsurance of transferred policies and contracts on the subject business.

(ii) The subject business shall vest in and become a liability of the assuming insurer;

(E) Order that the applicant provide notice of the transfer and novation according to § 23-69-505 ; and

(F) Make any orders with respect to incidental, consequential, and supplementary matters as are necessary to assure the insurance business transfer plan is fully and effectively executed.

(k) If the court finds that the insurance business transfer plan should not be approved, the court by its order may: (1) Deny the petition; or (2) Provide the applicant leave to file an amended insurance business transfer plan and petition.

(1) Deny the petition; or

(2) Provide the applicant leave to file an amended insurance business transfer plan and petition.

(l) This section does not affect the right of appeal for any party.

Added by Act 2021, No. 1018,§ 1, eff. 7/28/2021.
Ark. Code Ann. § 23-90-114 — AR Code / Title 23 / Chapter 90 / Section 23-90-114
Accounting for and repayment of assessments
Status: in_force

(a) (1) Upon receipt from an insurer of payment of an assessment or partial assessment, the receiver shall provide the insurer with a participation receipt which shall create a liability against the assessment fund maintained by the Insurance Commissioner. (2) The assessment fund from which an advance is made to an insolvent insurer for the payment of covered claims shall be regarded as a general creditor of the insolvent insurer for the amount of funds so advanced, provided that, with reference to the remaining balance of any advances received by the receiver and not expended in payment of covered claims, the claim of the assessment fund shall have preference over other general creditors. (3) The receiver of any insolvent insurer shall adopt accounting procedures reflecting the expenditure and use of all funds received from the assessment fund and shall make a final report of the expenditure and use of these funds to the commissioner. This final report shall set forth the remaining balance, if any, from the moneys advanced from the assessment fund. (4) The receiver shall also make any interim reports concerning the accounting and that may be required by the commissioner. (5) Upon completion of the final report and as soon after completion as is practicable, the receiver shall refund the remaining balance of the advances to the assessment fund. (b) Should the commissioner at any time determine that there exist moneys in the assessment fund in excess of those reasonably necessary for efficient future operation under the terms of this chapter, the commissioner shall cause the excess moneys to be returned pro rata to the holders of any participation receipts on which there is a balance outstanding after deducting any credits taken against premium taxes as authorized in § 23-90-119 . If after a distribution the commissioner finds that an excess amount still exists in the fund or if there are no participation receipts on which there is an outstanding balance, the commissioner shall cause the excess amount to be deposited with the Treasurer of State for credit to the General Revenue Fund Account of the State Apportionment Fund of this state. Acts 1977, No. 871, § 9; A.S.A. 1947, § 66-5509.

(a) (1) Upon receipt from an insurer of payment of an assessment or partial assessment, the receiver shall provide the insurer with a participation receipt which shall create a liability against the assessment fund maintained by the Insurance Commissioner. (2) The assessment fund from which an advance is made to an insolvent insurer for the payment of covered claims shall be regarded as a general creditor of the insolvent insurer for the amount of funds so advanced, provided that, with reference to the remaining balance of any advances received by the receiver and not expended in payment of covered claims, the claim of the assessment fund shall have preference over other general creditors. (3) The receiver of any insolvent insurer shall adopt accounting procedures reflecting the expenditure and use of all funds received from the assessment fund and shall make a final report of the expenditure and use of these funds to the commissioner. This final report shall set forth the remaining balance, if any, from the moneys advanced from the assessment fund. (4) The receiver shall also make any interim reports concerning the accounting and that may be required by the commissioner. (5) Upon completion of the final report and as soon after completion as is practicable, the receiver shall refund the remaining balance of the advances to the assessment fund.

(1) Upon receipt from an insurer of payment of an assessment or partial assessment, the receiver shall provide the insurer with a participation receipt which shall create a liability against the assessment fund maintained by the Insurance Commissioner.

(2) The assessment fund from which an advance is made to an insolvent insurer for the payment of covered claims shall be regarded as a general creditor of the insolvent insurer for the amount of funds so advanced, provided that, with reference to the remaining balance of any advances received by the receiver and not expended in payment of covered claims, the claim of the assessment fund shall have preference over other general creditors.

(3) The receiver of any insolvent insurer shall adopt accounting procedures reflecting the expenditure and use of all funds received from the assessment fund and shall make a final report of the expenditure and use of these funds to the commissioner. This final report shall set forth the remaining balance, if any, from the moneys advanced from the assessment fund.

(4) The receiver shall also make any interim reports concerning the accounting and that may be required by the commissioner.

(5) Upon completion of the final report and as soon after completion as is practicable, the receiver shall refund the remaining balance of the advances to the assessment fund.

(b) Should the commissioner at any time determine that there exist moneys in the assessment fund in excess of those reasonably necessary for efficient future operation under the terms of this chapter, the commissioner shall cause the excess moneys to be returned pro rata to the holders of any participation receipts on which there is a balance outstanding after deducting any credits taken against premium taxes as authorized in § 23-90-119 . If after a distribution the commissioner finds that an excess amount still exists in the fund or if there are no participation receipts on which there is an outstanding balance, the commissioner shall cause the excess amount to be deposited with the Treasurer of State for credit to the General Revenue Fund Account of the State Apportionment Fund of this state.

Acts 1977, No. 871, § 9; A.S.A. 1947, § 66-5509.
Ark. Code Ann. § 23-79-307 — AR Code / Title 23 / Chapter 79 / Subchapter 3 / Section 23-79-307
Standards - Definition
Status: in_force

(a) In addition to other applicable provisions of the Arkansas Insurance Code, insurers and insurance policies subject to the provisions of this subchapter shall meet the following standards: (1) Notice of claim given by or on behalf of the named insured to any authorized agent of the insurer with specific information to identify the insured is deemed notice of claim to the insurer; (2) Policies may be issued for a term in excess of twelve (12) months with the premium adjustable on an annual basis if the policy contains an express provision to that effect. At least thirty (30) days' advance notice in writing of the premium to be charged on the policy anniversary date must be given to the insured and the agent of record if the insured has furnished the information necessary to calculate the premium; (3) Forms or endorsements that reduce, restrict, or modify the original policy coverage shall be accepted and signed by the named insured if those forms or endorsements were issued: (A) After the policy inception date but before renewal of the policy; and (B) Not at the request of the named insured; (4) Any policy providing an aggregate limit of liability within the schedule of limits must include a notice specifying that the policy limit is an "aggregate". The aggregate limit provision must be clearly defined within the policy; (5) (A) Policies containing provisions that would reduce the limit of liability available for judgments or settlements by the amount of payment made for defense cost or claim expenses shall not be approved by the Insurance Commissioner unless a separate limit for defense costs equal to one hundred percent (100%) of the annual aggregate limit of liability stated in the policy for judgments or settlements is offered for defense costs or claims expenses to the insured. However, no policy covering automobile liability insurance may contain the defense within the limits concept. (B) This subsection does not apply to policies or contracts that the commissioner may exempt by order upon a finding that this subsection may not practically be applied or that its application is not necessary or desirable for the protection of the public; (6) (A) When an insurer revises its rates or rules and the revision results in a premium increase equal to or greater than twenty-five percent (25%) on any renewal policy issued for a term of twelve (12) months or less, the insurer shall mail or deliver to the insured's agent not less than thirty (30) days prior to the effective date of renewal, and to the insured not less than ten (10) days prior to the effective date of renewal, notice specifically stating the insurer's intention to increase the premium by an amount equal to or greater than twenty-five percent (25%). (B) If the notice is not given as stated in subdivision (a)(6)(A) of this section, the insurer is required to extend the existing policy thirty (30) days from the date the notice is mailed or delivered. The premium for the policy as extended in such circumstances shall be no more than the pro rata premium of the existing policy; (7) Except in the case of nonpayment of premium, an insurer shall renew a policy unless a written notice of nonrenewal is mailed at least sixty (60) days prior to the expiration date of the policy or, for a policy for a term longer than one (1) year and not having a fixed expiration date, sixty (60) days prior to the anniversary date; and (8) Policies containing an exclusion for punitive damages must include a definition of punitive damages substantially similar to the following: "Punitive damages" are damages that may be imposed to punish a wrongdoer and to deter others from similar conduct. (b) As used in this section, "renewal" or "renew" means the issuance and delivery by an insurer of a policy superseding a policy previously issued by the insurer at the end of the previously issued policy period if the policy is delivered by: (1) The same insurer; or (2) An affiliate or subsidiary, as those terms are defined in § 23-63-503 , that has a financial strength rating that is: (A) Issued by an industry-recognized independent insurance rating company; and (B) At least as good as the insurer issuing the superseded policy. (c) This section does not repeal or supersede any requirements of the Insurance Holding Company Regulatory Act, § 23-63-501 et seq., including without limitation the provisions of § 23-63-515 that are applicable to material transactions between an insurer and an insurer's affiliates. Amended by Act 2019, No. 689,§ 1, eff. 7/24/2019. Amended by Act 2019, No. 343,§ 1, eff. 7/24/2019. Acts 1987, No. 204, § 3; 1989, No. 797, § 1; 1991, No. 1123, §§ 14, 15; 1999, No. 458, § 9; 2001, No. 1555, §§ 13-15.

(a) In addition to other applicable provisions of the Arkansas Insurance Code, insurers and insurance policies subject to the provisions of this subchapter shall meet the following standards: (1) Notice of claim given by or on behalf of the named insured to any authorized agent of the insurer with specific information to identify the insured is deemed notice of claim to the insurer; (2) Policies may be issued for a term in excess of twelve (12) months with the premium adjustable on an annual basis if the policy contains an express provision to that effect. At least thirty (30) days' advance notice in writing of the premium to be charged on the policy anniversary date must be given to the insured and the agent of record if the insured has furnished the information necessary to calculate the premium; (3) Forms or endorsements that reduce, restrict, or modify the original policy coverage shall be accepted and signed by the named insured if those forms or endorsements were issued: (A) After the policy inception date but before renewal of the policy; and (B) Not at the request of the named insured; (4) Any policy providing an aggregate limit of liability within the schedule of limits must include a notice specifying that the policy limit is an "aggregate". The aggregate limit provision must be clearly defined within the policy; (5) (A) Policies containing provisions that would reduce the limit of liability available for judgments or settlements by the amount of payment made for defense cost or claim expenses shall not be approved by the Insurance Commissioner unless a separate limit for defense costs equal to one hundred percent (100%) of the annual aggregate limit of liability stated in the policy for judgments or settlements is offered for defense costs or claims expenses to the insured. However, no policy covering automobile liability insurance may contain the defense within the limits concept. (B) This subsection does not apply to policies or contracts that the commissioner may exempt by order upon a finding that this subsection may not practically be applied or that its application is not necessary or desirable for the protection of the public; (6) (A) When an insurer revises its rates or rules and the revision results in a premium increase equal to or greater than twenty-five percent (25%) on any renewal policy issued for a term of twelve (12) months or less, the insurer shall mail or deliver to the insured's agent not less than thirty (30) days prior to the effective date of renewal, and to the insured not less than ten (10) days prior to the effective date of renewal, notice specifically stating the insurer's intention to increase the premium by an amount equal to or greater than twenty-five percent (25%). (B) If the notice is not given as stated in subdivision (a)(6)(A) of this section, the insurer is required to extend the existing policy thirty (30) days from the date the notice is mailed or delivered. The premium for the policy as extended in such circumstances shall be no more than the pro rata premium of the existing policy; (7) Except in the case of nonpayment of premium, an insurer shall renew a policy unless a written notice of nonrenewal is mailed at least sixty (60) days prior to the expiration date of the policy or, for a policy for a term longer than one (1) year and not having a fixed expiration date, sixty (60) days prior to the anniversary date; and (8) Policies containing an exclusion for punitive damages must include a definition of punitive damages substantially similar to the following: "Punitive damages" are damages that may be imposed to punish a wrongdoer and to deter others from similar conduct.

(1) Notice of claim given by or on behalf of the named insured to any authorized agent of the insurer with specific information to identify the insured is deemed notice of claim to the insurer;

(2) Policies may be issued for a term in excess of twelve (12) months with the premium adjustable on an annual basis if the policy contains an express provision to that effect. At least thirty (30) days' advance notice in writing of the premium to be charged on the policy anniversary date must be given to the insured and the agent of record if the insured has furnished the information necessary to calculate the premium;

(3) Forms or endorsements that reduce, restrict, or modify the original policy coverage shall be accepted and signed by the named insured if those forms or endorsements were issued: (A) After the policy inception date but before renewal of the policy; and (B) Not at the request of the named insured;

(A) After the policy inception date but before renewal of the policy; and

(B) Not at the request of the named insured;

(4) Any policy providing an aggregate limit of liability within the schedule of limits must include a notice specifying that the policy limit is an "aggregate". The aggregate limit provision must be clearly defined within the policy;

(5) (A) Policies containing provisions that would reduce the limit of liability available for judgments or settlements by the amount of payment made for defense cost or claim expenses shall not be approved by the Insurance Commissioner unless a separate limit for defense costs equal to one hundred percent (100%) of the annual aggregate limit of liability stated in the policy for judgments or settlements is offered for defense costs or claims expenses to the insured. However, no policy covering automobile liability insurance may contain the defense within the limits concept. (B) This subsection does not apply to policies or contracts that the commissioner may exempt by order upon a finding that this subsection may not practically be applied or that its application is not necessary or desirable for the protection of the public;

(A) Policies containing provisions that would reduce the limit of liability available for judgments or settlements by the amount of payment made for defense cost or claim expenses shall not be approved by the Insurance Commissioner unless a separate limit for defense costs equal to one hundred percent (100%) of the annual aggregate limit of liability stated in the policy for judgments or settlements is offered for defense costs or claims expenses to the insured. However, no policy covering automobile liability insurance may contain the defense within the limits concept.

(B) This subsection does not apply to policies or contracts that the commissioner may exempt by order upon a finding that this subsection may not practically be applied or that its application is not necessary or desirable for the protection of the public;

(6) (A) When an insurer revises its rates or rules and the revision results in a premium increase equal to or greater than twenty-five percent (25%) on any renewal policy issued for a term of twelve (12) months or less, the insurer shall mail or deliver to the insured's agent not less than thirty (30) days prior to the effective date of renewal, and to the insured not less than ten (10) days prior to the effective date of renewal, notice specifically stating the insurer's intention to increase the premium by an amount equal to or greater than twenty-five percent (25%). (B) If the notice is not given as stated in subdivision (a)(6)(A) of this section, the insurer is required to extend the existing policy thirty (30) days from the date the notice is mailed or delivered. The premium for the policy as extended in such circumstances shall be no more than the pro rata premium of the existing policy;

(A) When an insurer revises its rates or rules and the revision results in a premium increase equal to or greater than twenty-five percent (25%) on any renewal policy issued for a term of twelve (12) months or less, the insurer shall mail or deliver to the insured's agent not less than thirty (30) days prior to the effective date of renewal, and to the insured not less than ten (10) days prior to the effective date of renewal, notice specifically stating the insurer's intention to increase the premium by an amount equal to or greater than twenty-five percent (25%).

(B) If the notice is not given as stated in subdivision (a)(6)(A) of this section, the insurer is required to extend the existing policy thirty (30) days from the date the notice is mailed or delivered. The premium for the policy as extended in such circumstances shall be no more than the pro rata premium of the existing policy;

(7) Except in the case of nonpayment of premium, an insurer shall renew a policy unless a written notice of nonrenewal is mailed at least sixty (60) days prior to the expiration date of the policy or, for a policy for a term longer than one (1) year and not having a fixed expiration date, sixty (60) days prior to the anniversary date; and

(8) Policies containing an exclusion for punitive damages must include a definition of punitive damages substantially similar to the following: "Punitive damages" are damages that may be imposed to punish a wrongdoer and to deter others from similar conduct.

(b) As used in this section, "renewal" or "renew" means the issuance and delivery by an insurer of a policy superseding a policy previously issued by the insurer at the end of the previously issued policy period if the policy is delivered by: (1) The same insurer; or (2) An affiliate or subsidiary, as those terms are defined in § 23-63-503 , that has a financial strength rating that is: (A) Issued by an industry-recognized independent insurance rating company; and (B) At least as good as the insurer issuing the superseded policy.

(1) The same insurer; or

(2) An affiliate or subsidiary, as those terms are defined in § 23-63-503 , that has a financial strength rating that is: (A) Issued by an industry-recognized independent insurance rating company; and (B) At least as good as the insurer issuing the superseded policy.

(A) Issued by an industry-recognized independent insurance rating company; and

(B) At least as good as the insurer issuing the superseded policy.

(c) This section does not repeal or supersede any requirements of the Insurance Holding Company Regulatory Act, § 23-63-501 et seq., including without limitation the provisions of § 23-63-515 that are applicable to material transactions between an insurer and an insurer's affiliates.

Amended by Act 2019, No. 689,§ 1, eff. 7/24/2019.

Amended by Act 2019, No. 343,§ 1, eff. 7/24/2019.

Acts 1987, No. 204, § 3; 1989, No. 797, § 1; 1991, No. 1123, §§ 14, 15; 1999, No. 458, § 9; 2001, No. 1555, §§ 13-15.
Ark. Code Ann. § 23-46-506 — AR Code / Title 23 / Chapter 46 / Subchapter 5 / Section 23-46-506
Examination procedure
Status: in_force

(a) The Bank Commissioner or any examiner appointed by him or her shall have power to make a thorough examination of all the records and affairs of any state bank, any Arkansas bank holding company, or any subsidiary trust company. (b) (1) In making examinations, the representative of the State Bank Department may examine under oath any stockholder, director, officer, agent, clerk, or other employee or representative of the state bank, Arkansas bank holding company, or subsidiary trust company, or any other person, touching the matters he or he may be authorized to inquire and examine into. (2) (A) He or she may subpoena and, by attachment, compel the attendance of any person in this state to testify under oath before him or her in relation to the affairs of the state bank, Arkansas bank holding company, or subsidiary trust company. (B) All witnesses who appear in obedience to a subpoena shall be entitled to and shall receive the same per diem fees and mileage as witnesses in civil cases in the circuit courts of this state. (c) (1) The representative of the department making the examination shall make a detailed report of the financial institution so examined, which report shall be filed in the office of the commissioner. (2) All comments or criticisms contained in each report shall be presented to the board of directors by the management of the financial institution so examined promptly after receipt thereof. Acts 1997, No. 89, § 1.

(a) The Bank Commissioner or any examiner appointed by him or her shall have power to make a thorough examination of all the records and affairs of any state bank, any Arkansas bank holding company, or any subsidiary trust company.

(b) (1) In making examinations, the representative of the State Bank Department may examine under oath any stockholder, director, officer, agent, clerk, or other employee or representative of the state bank, Arkansas bank holding company, or subsidiary trust company, or any other person, touching the matters he or he may be authorized to inquire and examine into. (2) (A) He or she may subpoena and, by attachment, compel the attendance of any person in this state to testify under oath before him or her in relation to the affairs of the state bank, Arkansas bank holding company, or subsidiary trust company. (B) All witnesses who appear in obedience to a subpoena shall be entitled to and shall receive the same per diem fees and mileage as witnesses in civil cases in the circuit courts of this state.

(1) In making examinations, the representative of the State Bank Department may examine under oath any stockholder, director, officer, agent, clerk, or other employee or representative of the state bank, Arkansas bank holding company, or subsidiary trust company, or any other person, touching the matters he or he may be authorized to inquire and examine into.

(2) (A) He or she may subpoena and, by attachment, compel the attendance of any person in this state to testify under oath before him or her in relation to the affairs of the state bank, Arkansas bank holding company, or subsidiary trust company. (B) All witnesses who appear in obedience to a subpoena shall be entitled to and shall receive the same per diem fees and mileage as witnesses in civil cases in the circuit courts of this state.

(A) He or she may subpoena and, by attachment, compel the attendance of any person in this state to testify under oath before him or her in relation to the affairs of the state bank, Arkansas bank holding company, or subsidiary trust company.

(B) All witnesses who appear in obedience to a subpoena shall be entitled to and shall receive the same per diem fees and mileage as witnesses in civil cases in the circuit courts of this state.

(c) (1) The representative of the department making the examination shall make a detailed report of the financial institution so examined, which report shall be filed in the office of the commissioner. (2) All comments or criticisms contained in each report shall be presented to the board of directors by the management of the financial institution so examined promptly after receipt thereof.

(1) The representative of the department making the examination shall make a detailed report of the financial institution so examined, which report shall be filed in the office of the commissioner.

(2) All comments or criticisms contained in each report shall be presented to the board of directors by the management of the financial institution so examined promptly after receipt thereof.

Acts 1997, No. 89, § 1.
Ark. Code Ann. § 23-62-306 — AR Code / Title 23 / Chapter 62 / Subchapter 3 / Section 23-62-306
Asset or reduction from liability for reinsurance ceded by domestic insurer to assuming insurer - Noncompliant assuming insurer
Status: in_force

(a) (1) An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of § 23-62-305 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer. (2) The Insurance Commissioner shall promulgate rules necessary to implement this section that address: (A) The valuation of assets or reserve credits; (B) The amount and forms of security supporting reinsurance arrangements as described in § 23-62-308(b) ; and (C) The circumstances in which credit of a noncomplying assuming insurer shall be reduced or eliminated. (b) The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is held: (1) In the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or (2) In the case of a trust, in a qualified United States financial institution as defined in § 23-62-307(b) . (c) The security may be in the form of: (1) Cash; (2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets; (3) (A) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution as defined in § 23-62-307(a) , effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement. (B) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, shall continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or (4) Any other form of security acceptable to the Insurance Commissioner. Amended by Act 2021, No. 672,§ 2, eff. 7/1/2021. Amended by Act 2015, No. 1223,§ 2, eff. 7/22/2015, applicable to cessation under reinsurance agreements issued, renewed, or amended on or after six (6) months after the effective date of this act. Acts 1991, No. 723, § 13; 2005, No. 506, § 14.

(a) (1) An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of § 23-62-305 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer. (2) The Insurance Commissioner shall promulgate rules necessary to implement this section that address: (A) The valuation of assets or reserve credits; (B) The amount and forms of security supporting reinsurance arrangements as described in § 23-62-308(b) ; and (C) The circumstances in which credit of a noncomplying assuming insurer shall be reduced or eliminated.

(1) An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of § 23-62-305 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer.

(2) The Insurance Commissioner shall promulgate rules necessary to implement this section that address: (A) The valuation of assets or reserve credits; (B) The amount and forms of security supporting reinsurance arrangements as described in § 23-62-308(b) ; and (C) The circumstances in which credit of a noncomplying assuming insurer shall be reduced or eliminated.

(A) The valuation of assets or reserve credits;

(B) The amount and forms of security supporting reinsurance arrangements as described in § 23-62-308(b) ; and

(C) The circumstances in which credit of a noncomplying assuming insurer shall be reduced or eliminated.

(b) The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is held: (1) In the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or (2) In the case of a trust, in a qualified United States financial institution as defined in § 23-62-307(b) .

(1) In the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or

(2) In the case of a trust, in a qualified United States financial institution as defined in § 23-62-307(b) .

(c) The security may be in the form of: (1) Cash; (2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets; (3) (A) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution as defined in § 23-62-307(a) , effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement. (B) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, shall continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or (4) Any other form of security acceptable to the Insurance Commissioner.

(1) Cash;

(2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets;

(3) (A) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution as defined in § 23-62-307(a) , effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement. (B) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, shall continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or

(A) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution as defined in § 23-62-307(a) , effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement.

(B) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, shall continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or

(4) Any other form of security acceptable to the Insurance Commissioner.

Amended by Act 2021, No. 672,§ 2, eff. 7/1/2021.

Amended by Act 2015, No. 1223,§ 2, eff. 7/22/2015, applicable to cessation under reinsurance agreements issued, renewed, or amended on or after six (6) months after the effective date of this act.

Acts 1991, No. 723, § 13; 2005, No. 506, § 14.
Ark. Code Ann. § 23-63-515 — AR Code / Title 23 / Chapter 63 / Subchapter 5 / Section 23-63-515
Standards - Definition
Status: in_force

(a) (1) Material transactions by insurers registered with the Insurance Commissioner under § 23-63-514 with their affiliates shall be subject to the following standards: (A) The terms shall be fair and reasonable; (B) The books, accounts, and records of every party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transactions, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties; (C) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs; (D) The charges or fees for services performed shall be reasonable; (E) The expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; and (F) The commissioner by rule may establish additional requirements for a cost-sharing service agreement or a management agreement. (2) (A) A domestic insurer subject to this subchapter and a person in its holding company system may not enter into a transaction, as described in subdivision (a)(2)(B) of this section, unless the insurer notifies the commissioner in writing of its intention at least thirty (30) days before, or less, as the commissioner may permit, and the commissioner does not disapprove of the transaction within such a period. (B) A transaction that requires prior notice to the commissioner by a domestic insurer includes: (i) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments, provided the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets; (ii) Loans or extensions of credit to any person who is not an affiliate when the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer making the loans or extensions of credit, provided that the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets; (iii) Reinsurance agreements or modifications thereto, including: (a) All reinsurance pooling agreements; and (b) Agreements in which the reinsurance premium, a change in the insurer's liabilities, any projected reinsurance premium, or a change in the insurer's liabilities in any of the next three (3) years equals or exceeds five percent (5%) of the insurer's surplus as regards policyholders, as of December 31 next-preceding, including those agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one (1) or more affiliates of the insurer; (iv) All management agreements, service contracts, tax allocation agreements, and all cost-sharing arrangements; (v) Any material transactions specified by regulation that the commissioner determines may adversely affect the interests of the insurer's policyholders; and (vi) (a) Any amendment or modification of an affiliate agreement that is subject to the materiality standards under subdivision (a)(1) of this section, including the reason for the amendment or modification and the financial impact on the domestic insurer. (b) A domestic insurer shall notify the commissioner within thirty (30) days after a termination of a previously filed agreement in a format that is acceptable to the commissioner, to determine if further reporting or filing is required. (3) A domestic insurer subject to this subchapter may not enter into transactions which are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the threshold amount and thus avoid the review that would otherwise occur. If the commissioner determines that those separate transactions were entered into over any twelve-month period for such a purpose, the commissioner may exercise his or her authority under § 23-63-522 . (4) In reviewing transactions pursuant to subdivision (a)(2) of this section, the commissioner shall consider whether the transactions comply with the standards set forth in subdivision (a)(1) of this section and whether they may adversely affect the interests of policyholders. (5) The commissioner shall be notified within thirty (30) days of any investment of a domestic insurer subject to this subchapter in any one (1) corporation if the total investment in such a corporation by the insurance holding company system exceeds ten percent (10%) of the corporation's voting securities. (b) For purposes of this subchapter, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered: (1) The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria; (2) The extent to which the insurer's business is diversified among the several lines of insurance; (3) The number and size of risks insured in each line of business; (4) The extent of the geographical dispersion of the insurer's insured risks; (5) The nature and extent of the insurer's reinsurance program; (6) The quality, diversification, and liquidity of the insurer's investment portfolio; (7) The recent, past, and projected future trend in the size of the insurer's surplus as regards policyholders; (8) The surplus as regards policyholders maintained by other comparable insurers; (9) The adequacy of the insurer's reserves; and (10) The quality and liquidity of investments in subsidiaries made pursuant to § 23-63-505 . The commissioner may treat any investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in his or her judgment the investment so warrants. (c) No insurer subject to registration under § 23-63-514 shall pay any extraordinary dividend or make any other extraordinary distribution to its stockholders until: (1) Thirty (30) days after the commissioner has received notice of the declaration thereof and within that period has not disapproved the payment; or (2) The commissioner shall have approved the payment within the thirty-day period. (d) (1) As used in this section, "extraordinary dividend or distribution" means any dividend or distribution of cash or other property whose fair market value, together with that of the other dividends or distributions made within the preceding twelve (12) months, exceeds the greater of: (A) Ten percent (10%) of the insurer's surplus with regard to policyholders as of the December 31 preceding the payment of the dividend or distribution; or (B) The net gain from operations of the insurer if the insurer is a life insurer or the net income if the insurer is not a life insurer not including realized capital gains for the twelve-month period ending on the preceding December 31 but shall not include pro rata distributions of any class of the insurer's own securities. (2) (A) In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two (2) calendar years that has not already been paid out as a dividend. (B) The carry forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediately preceding calendar years. (e) Notwithstanding any other provisions of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner's approval, and the declaration shall confer no rights upon stockholders until: (1) The commissioner has approved the payment of the dividend or distribution; or (2) The commissioner has not disapproved the payment within the thirty-day period referred to in subsection (c) of this section. (f) Notwithstanding any other provisions of law, an insurer may declare and pay, subject to the provisions of this section, an extraordinary dividend or distribution from its gross paid-in and contributed surplus, provided that: (1) The dividend or distribution shall be made only upon a determination by the board of directors of the insurer that the assets of the insurer are in excess of the needs of its business; and (2) Each dividend or distribution, when made, shall be identified as a distribution from gross paid-in and contributed surplus, and the amount per share shall be disclosed to the shareholders receiving the dividend or distribution concurrently with its distribution. Amended by Act 2017, No. 386,§ 4, eff. 8/1/2017. Amended by Act 2015, No. 1223,§ 11, eff. 7/22/2015. Amended by Act 2015, No. 1223,§ 10, eff. 7/22/2015. Acts 1971, No. 288, § 7; 1973, No. 305, § 1; A.S.A. 1947, § 66-5007; Acts 1991, No. 723, § 24; 1993, No. 901, § 11; 2001, No. 1603, § 10; 2005, No. 506, § 23; 2007, No. 496, § 10.

(a) (1) Material transactions by insurers registered with the Insurance Commissioner under § 23-63-514 with their affiliates shall be subject to the following standards: (A) The terms shall be fair and reasonable; (B) The books, accounts, and records of every party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transactions, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties; (C) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs; (D) The charges or fees for services performed shall be reasonable; (E) The expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; and (F) The commissioner by rule may establish additional requirements for a cost-sharing service agreement or a management agreement. (2) (A) A domestic insurer subject to this subchapter and a person in its holding company system may not enter into a transaction, as described in subdivision (a)(2)(B) of this section, unless the insurer notifies the commissioner in writing of its intention at least thirty (30) days before, or less, as the commissioner may permit, and the commissioner does not disapprove of the transaction within such a period. (B) A transaction that requires prior notice to the commissioner by a domestic insurer includes: (i) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments, provided the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets; (ii) Loans or extensions of credit to any person who is not an affiliate when the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer making the loans or extensions of credit, provided that the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets; (iii) Reinsurance agreements or modifications thereto, including: (a) All reinsurance pooling agreements; and (b) Agreements in which the reinsurance premium, a change in the insurer's liabilities, any projected reinsurance premium, or a change in the insurer's liabilities in any of the next three (3) years equals or exceeds five percent (5%) of the insurer's surplus as regards policyholders, as of December 31 next-preceding, including those agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one (1) or more affiliates of the insurer; (iv) All management agreements, service contracts, tax allocation agreements, and all cost-sharing arrangements; (v) Any material transactions specified by regulation that the commissioner determines may adversely affect the interests of the insurer's policyholders; and (vi) (a) Any amendment or modification of an affiliate agreement that is subject to the materiality standards under subdivision (a)(1) of this section, including the reason for the amendment or modification and the financial impact on the domestic insurer. (b) A domestic insurer shall notify the commissioner within thirty (30) days after a termination of a previously filed agreement in a format that is acceptable to the commissioner, to determine if further reporting or filing is required. (3) A domestic insurer subject to this subchapter may not enter into transactions which are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the threshold amount and thus avoid the review that would otherwise occur. If the commissioner determines that those separate transactions were entered into over any twelve-month period for such a purpose, the commissioner may exercise his or her authority under § 23-63-522 . (4) In reviewing transactions pursuant to subdivision (a)(2) of this section, the commissioner shall consider whether the transactions comply with the standards set forth in subdivision (a)(1) of this section and whether they may adversely affect the interests of policyholders. (5) The commissioner shall be notified within thirty (30) days of any investment of a domestic insurer subject to this subchapter in any one (1) corporation if the total investment in such a corporation by the insurance holding company system exceeds ten percent (10%) of the corporation's voting securities.

(1) Material transactions by insurers registered with the Insurance Commissioner under § 23-63-514 with their affiliates shall be subject to the following standards: (A) The terms shall be fair and reasonable; (B) The books, accounts, and records of every party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transactions, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties; (C) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs; (D) The charges or fees for services performed shall be reasonable; (E) The expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; and (F) The commissioner by rule may establish additional requirements for a cost-sharing service agreement or a management agreement.

(A) The terms shall be fair and reasonable;

(B) The books, accounts, and records of every party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transactions, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties;

(C) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs;

(D) The charges or fees for services performed shall be reasonable;

(E) The expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; and

(F) The commissioner by rule may establish additional requirements for a cost-sharing service agreement or a management agreement.

(2) (A) A domestic insurer subject to this subchapter and a person in its holding company system may not enter into a transaction, as described in subdivision (a)(2)(B) of this section, unless the insurer notifies the commissioner in writing of its intention at least thirty (30) days before, or less, as the commissioner may permit, and the commissioner does not disapprove of the transaction within such a period. (B) A transaction that requires prior notice to the commissioner by a domestic insurer includes: (i) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments, provided the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets; (ii) Loans or extensions of credit to any person who is not an affiliate when the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer making the loans or extensions of credit, provided that the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets; (iii) Reinsurance agreements or modifications thereto, including: (a) All reinsurance pooling agreements; and (b) Agreements in which the reinsurance premium, a change in the insurer's liabilities, any projected reinsurance premium, or a change in the insurer's liabilities in any of the next three (3) years equals or exceeds five percent (5%) of the insurer's surplus as regards policyholders, as of December 31 next-preceding, including those agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one (1) or more affiliates of the insurer; (iv) All management agreements, service contracts, tax allocation agreements, and all cost-sharing arrangements; (v) Any material transactions specified by regulation that the commissioner determines may adversely affect the interests of the insurer's policyholders; and (vi) (a) Any amendment or modification of an affiliate agreement that is subject to the materiality standards under subdivision (a)(1) of this section, including the reason for the amendment or modification and the financial impact on the domestic insurer. (b) A domestic insurer shall notify the commissioner within thirty (30) days after a termination of a previously filed agreement in a format that is acceptable to the commissioner, to determine if further reporting or filing is required.

(A) A domestic insurer subject to this subchapter and a person in its holding company system may not enter into a transaction, as described in subdivision (a)(2)(B) of this section, unless the insurer notifies the commissioner in writing of its intention at least thirty (30) days before, or less, as the commissioner may permit, and the commissioner does not disapprove of the transaction within such a period.

(B) A transaction that requires prior notice to the commissioner by a domestic insurer includes: (i) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments, provided the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets; (ii) Loans or extensions of credit to any person who is not an affiliate when the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer making the loans or extensions of credit, provided that the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets; (iii) Reinsurance agreements or modifications thereto, including: (a) All reinsurance pooling agreements; and (b) Agreements in which the reinsurance premium, a change in the insurer's liabilities, any projected reinsurance premium, or a change in the insurer's liabilities in any of the next three (3) years equals or exceeds five percent (5%) of the insurer's surplus as regards policyholders, as of December 31 next-preceding, including those agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one (1) or more affiliates of the insurer; (iv) All management agreements, service contracts, tax allocation agreements, and all cost-sharing arrangements; (v) Any material transactions specified by regulation that the commissioner determines may adversely affect the interests of the insurer's policyholders; and (vi) (a) Any amendment or modification of an affiliate agreement that is subject to the materiality standards under subdivision (a)(1) of this section, including the reason for the amendment or modification and the financial impact on the domestic insurer. (b) A domestic insurer shall notify the commissioner within thirty (30) days after a termination of a previously filed agreement in a format that is acceptable to the commissioner, to determine if further reporting or filing is required.

(i) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments, provided the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets;

(a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and

(b) With respect to life insurers, three percent (3%) of the insurer's admitted assets;

(ii) Loans or extensions of credit to any person who is not an affiliate when the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer making the loans or extensions of credit, provided that the transactions are equal to or exceed as of December 31 next-preceding: (a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (b) With respect to life insurers, three percent (3%) of the insurer's admitted assets;

(a) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and

(b) With respect to life insurers, three percent (3%) of the insurer's admitted assets;

(iii) Reinsurance agreements or modifications thereto, including: (a) All reinsurance pooling agreements; and (b) Agreements in which the reinsurance premium, a change in the insurer's liabilities, any projected reinsurance premium, or a change in the insurer's liabilities in any of the next three (3) years equals or exceeds five percent (5%) of the insurer's surplus as regards policyholders, as of December 31 next-preceding, including those agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one (1) or more affiliates of the insurer;

(a) All reinsurance pooling agreements; and

(b) Agreements in which the reinsurance premium, a change in the insurer's liabilities, any projected reinsurance premium, or a change in the insurer's liabilities in any of the next three (3) years equals or exceeds five percent (5%) of the insurer's surplus as regards policyholders, as of December 31 next-preceding, including those agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one (1) or more affiliates of the insurer;

(iv) All management agreements, service contracts, tax allocation agreements, and all cost-sharing arrangements;

(v) Any material transactions specified by regulation that the commissioner determines may adversely affect the interests of the insurer's policyholders; and

(vi) (a) Any amendment or modification of an affiliate agreement that is subject to the materiality standards under subdivision (a)(1) of this section, including the reason for the amendment or modification and the financial impact on the domestic insurer. (b) A domestic insurer shall notify the commissioner within thirty (30) days after a termination of a previously filed agreement in a format that is acceptable to the commissioner, to determine if further reporting or filing is required.

(a) Any amendment or modification of an affiliate agreement that is subject to the materiality standards under subdivision (a)(1) of this section, including the reason for the amendment or modification and the financial impact on the domestic insurer.

(b) A domestic insurer shall notify the commissioner within thirty (30) days after a termination of a previously filed agreement in a format that is acceptable to the commissioner, to determine if further reporting or filing is required.

(3) A domestic insurer subject to this subchapter may not enter into transactions which are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the threshold amount and thus avoid the review that would otherwise occur. If the commissioner determines that those separate transactions were entered into over any twelve-month period for such a purpose, the commissioner may exercise his or her authority under § 23-63-522 .

(4) In reviewing transactions pursuant to subdivision (a)(2) of this section, the commissioner shall consider whether the transactions comply with the standards set forth in subdivision (a)(1) of this section and whether they may adversely affect the interests of policyholders.

(5) The commissioner shall be notified within thirty (30) days of any investment of a domestic insurer subject to this subchapter in any one (1) corporation if the total investment in such a corporation by the insurance holding company system exceeds ten percent (10%) of the corporation's voting securities.

(b) For purposes of this subchapter, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered: (1) The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria; (2) The extent to which the insurer's business is diversified among the several lines of insurance; (3) The number and size of risks insured in each line of business; (4) The extent of the geographical dispersion of the insurer's insured risks; (5) The nature and extent of the insurer's reinsurance program; (6) The quality, diversification, and liquidity of the insurer's investment portfolio; (7) The recent, past, and projected future trend in the size of the insurer's surplus as regards policyholders; (8) The surplus as regards policyholders maintained by other comparable insurers; (9) The adequacy of the insurer's reserves; and (10) The quality and liquidity of investments in subsidiaries made pursuant to § 23-63-505 . The commissioner may treat any investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in his or her judgment the investment so warrants.

(1) The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria;

(2) The extent to which the insurer's business is diversified among the several lines of insurance;

(3) The number and size of risks insured in each line of business;

(4) The extent of the geographical dispersion of the insurer's insured risks;

(5) The nature and extent of the insurer's reinsurance program;

(6) The quality, diversification, and liquidity of the insurer's investment portfolio;

(7) The recent, past, and projected future trend in the size of the insurer's surplus as regards policyholders;

(8) The surplus as regards policyholders maintained by other comparable insurers;

(9) The adequacy of the insurer's reserves; and

(10) The quality and liquidity of investments in subsidiaries made pursuant to § 23-63-505 . The commissioner may treat any investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in his or her judgment the investment so warrants.

(c) No insurer subject to registration under § 23-63-514 shall pay any extraordinary dividend or make any other extraordinary distribution to its stockholders until: (1) Thirty (30) days after the commissioner has received notice of the declaration thereof and within that period has not disapproved the payment; or (2) The commissioner shall have approved the payment within the thirty-day period.

(1) Thirty (30) days after the commissioner has received notice of the declaration thereof and within that period has not disapproved the payment; or

(2) The commissioner shall have approved the payment within the thirty-day period.

(d) (1) As used in this section, "extraordinary dividend or distribution" means any dividend or distribution of cash or other property whose fair market value, together with that of the other dividends or distributions made within the preceding twelve (12) months, exceeds the greater of: (A) Ten percent (10%) of the insurer's surplus with regard to policyholders as of the December 31 preceding the payment of the dividend or distribution; or (B) The net gain from operations of the insurer if the insurer is a life insurer or the net income if the insurer is not a life insurer not including realized capital gains for the twelve-month period ending on the preceding December 31 but shall not include pro rata distributions of any class of the insurer's own securities. (2) (A) In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two (2) calendar years that has not already been paid out as a dividend. (B) The carry forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediately preceding calendar years.

(1) As used in this section, "extraordinary dividend or distribution" means any dividend or distribution of cash or other property whose fair market value, together with that of the other dividends or distributions made within the preceding twelve (12) months, exceeds the greater of: (A) Ten percent (10%) of the insurer's surplus with regard to policyholders as of the December 31 preceding the payment of the dividend or distribution; or (B) The net gain from operations of the insurer if the insurer is a life insurer or the net income if the insurer is not a life insurer not including realized capital gains for the twelve-month period ending on the preceding December 31 but shall not include pro rata distributions of any class of the insurer's own securities.

(A) Ten percent (10%) of the insurer's surplus with regard to policyholders as of the December 31 preceding the payment of the dividend or distribution; or

(B) The net gain from operations of the insurer if the insurer is a life insurer or the net income if the insurer is not a life insurer not including realized capital gains for the twelve-month period ending on the preceding December 31 but shall not include pro rata distributions of any class of the insurer's own securities.

(2) (A) In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two (2) calendar years that has not already been paid out as a dividend. (B) The carry forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediately preceding calendar years.

(A) In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two (2) calendar years that has not already been paid out as a dividend.

(B) The carry forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediately preceding calendar years.

(e) Notwithstanding any other provisions of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner's approval, and the declaration shall confer no rights upon stockholders until: (1) The commissioner has approved the payment of the dividend or distribution; or (2) The commissioner has not disapproved the payment within the thirty-day period referred to in subsection (c) of this section.

(1) The commissioner has approved the payment of the dividend or distribution; or

(2) The commissioner has not disapproved the payment within the thirty-day period referred to in subsection (c) of this section.

(f) Notwithstanding any other provisions of law, an insurer may declare and pay, subject to the provisions of this section, an extraordinary dividend or distribution from its gross paid-in and contributed surplus, provided that: (1) The dividend or distribution shall be made only upon a determination by the board of directors of the insurer that the assets of the insurer are in excess of the needs of its business; and (2) Each dividend or distribution, when made, shall be identified as a distribution from gross paid-in and contributed surplus, and the amount per share shall be disclosed to the shareholders receiving the dividend or distribution concurrently with its distribution.

(1) The dividend or distribution shall be made only upon a determination by the board of directors of the insurer that the assets of the insurer are in excess of the needs of its business; and

(2) Each dividend or distribution, when made, shall be identified as a distribution from gross paid-in and contributed surplus, and the amount per share shall be disclosed to the shareholders receiving the dividend or distribution concurrently with its distribution.

Amended by Act 2017, No. 386,§ 4, eff. 8/1/2017.

Amended by Act 2015, No. 1223,§ 11, eff. 7/22/2015.

Amended by Act 2015, No. 1223,§ 10, eff. 7/22/2015.

Acts 1971, No. 288, § 7; 1973, No. 305, § 1; A.S.A. 1947, § 66-5007; Acts 1991, No. 723, § 24; 1993, No. 901, § 11; 2001, No. 1603, § 10; 2005, No. 506, § 23; 2007, No. 496, § 10.
Ark. Code Ann. § 23-64-221 — AR Code / Title 23 / Chapter 64 / Subchapter 2 / Section 23-64-221
Vending machines
Status: in_force

(a) A licensed producer may solicit applications for and issue policies of personal travel and accident insurance by means of mechanical vending machines supervised by him or her and placed at airports, railroad stations, bus stations, hotels, and similar places of convenience to the traveling public if the Insurance Commissioner finds that: (1) The policy to be so sold provides reasonable coverage and benefits, is reasonably suited for sale and issuance through vending machines, and that use of such a machine therefor in a particular proposed location would be of material convenience to the public; (2) The type of vending machine proposed to be used is reasonably suitable and practical for the purpose; (3) Reasonable means are provided for informing the prospective purchaser of the policy of the coverage and restrictions of the policy; and (4) Reasonable means are provided for refund to the applicant or prospective applicant of money inserted in defective machines and for which no insurance or a less amount than that paid for is actually received. (b) (1) As to each machine to be so used, the commissioner shall issue to the agent a special vending machine license. (2) The license shall specify the name and address of the insurer and agent, the name of the policy to be sold, the serial number of the machine, and the place where the machine is to be in operation. (3) The license shall be subject to annual continuation, expiration, suspension, or revocation coincidentally with that of the agent. (4) The commissioner shall also revoke the license as to any machine for which he or she finds that the conditions upon which the machine was licensed, as referred to in subsection (a) of this section, no longer exist. (5) The license fee shall be as stated in § 23-61-401 for each license year or part of a year for each respective vending machine. (6) Proof of the existence of a subsisting license shall be displayed on or about each vending machine in use in such a manner as the commissioner may reasonably require. (c) Application for insurance issued by any vending machine must be signed by or on behalf of the individual to be so insured, as provided in § 23-79-105 . Acts 1959, No. 148, § 171; A.S.A. 1947, § 66-2828; Acts 1997, No. 1004, § 1; 2003, No. 1203, § 7.

(a) A licensed producer may solicit applications for and issue policies of personal travel and accident insurance by means of mechanical vending machines supervised by him or her and placed at airports, railroad stations, bus stations, hotels, and similar places of convenience to the traveling public if the Insurance Commissioner finds that: (1) The policy to be so sold provides reasonable coverage and benefits, is reasonably suited for sale and issuance through vending machines, and that use of such a machine therefor in a particular proposed location would be of material convenience to the public; (2) The type of vending machine proposed to be used is reasonably suitable and practical for the purpose; (3) Reasonable means are provided for informing the prospective purchaser of the policy of the coverage and restrictions of the policy; and (4) Reasonable means are provided for refund to the applicant or prospective applicant of money inserted in defective machines and for which no insurance or a less amount than that paid for is actually received.

(1) The policy to be so sold provides reasonable coverage and benefits, is reasonably suited for sale and issuance through vending machines, and that use of such a machine therefor in a particular proposed location would be of material convenience to the public;

(2) The type of vending machine proposed to be used is reasonably suitable and practical for the purpose;

(3) Reasonable means are provided for informing the prospective purchaser of the policy of the coverage and restrictions of the policy; and

(4) Reasonable means are provided for refund to the applicant or prospective applicant of money inserted in defective machines and for which no insurance or a less amount than that paid for is actually received.

(b) (1) As to each machine to be so used, the commissioner shall issue to the agent a special vending machine license. (2) The license shall specify the name and address of the insurer and agent, the name of the policy to be sold, the serial number of the machine, and the place where the machine is to be in operation. (3) The license shall be subject to annual continuation, expiration, suspension, or revocation coincidentally with that of the agent. (4) The commissioner shall also revoke the license as to any machine for which he or she finds that the conditions upon which the machine was licensed, as referred to in subsection (a) of this section, no longer exist. (5) The license fee shall be as stated in § 23-61-401 for each license year or part of a year for each respective vending machine. (6) Proof of the existence of a subsisting license shall be displayed on or about each vending machine in use in such a manner as the commissioner may reasonably require.

(1) As to each machine to be so used, the commissioner shall issue to the agent a special vending machine license.

(2) The license shall specify the name and address of the insurer and agent, the name of the policy to be sold, the serial number of the machine, and the place where the machine is to be in operation.

(3) The license shall be subject to annual continuation, expiration, suspension, or revocation coincidentally with that of the agent.

(4) The commissioner shall also revoke the license as to any machine for which he or she finds that the conditions upon which the machine was licensed, as referred to in subsection (a) of this section, no longer exist.

(5) The license fee shall be as stated in § 23-61-401 for each license year or part of a year for each respective vending machine.

(6) Proof of the existence of a subsisting license shall be displayed on or about each vending machine in use in such a manner as the commissioner may reasonably require.

(c) Application for insurance issued by any vending machine must be signed by or on behalf of the individual to be so insured, as provided in § 23-79-105 .

Acts 1959, No. 148, § 171; A.S.A. 1947, § 66-2828; Acts 1997, No. 1004, § 1; 2003, No. 1203, § 7.
Ark. Code Ann. § 23-110-308 — AR Code / Title 23 / Chapter 110 / Subchapter 3 / Section 23-110-308
Employees
Status: in_force

(a) (1) Each franchise holder under this chapter shall require each of its employees to complete a written application for employment. Among other things, the application shall state: (A) Whether the applicant is a registered voter in Arkansas; and (B) If the applicant is a registered voter in Arkansas, the date on which the applicant became a registered voter in Arkansas. (2) Each application shall be signed by the applicant. If the information contained in the application is false, then the applicant shall be guilty of a misdemeanor and upon conviction shall be fined in an amount of not less than one hundred dollars ($100) nor more than five hundred dollars ($500). (b) (1) At least eighty percent (80%) of the employees of each franchise holder under this chapter shall be registered voters in Arkansas, excluding employees in the franchise holder's pari-mutuel department and the following professional racing officials: (A) Stewards; (B) Judges; (C) Racing secretary; (D) Starter; (E) Clerk of scales; (F) Paddock judge; (G) Patrol judges; and (H) Identifier. (2) At least sixty percent (60%) of the employees in the franchise holder's pari-mutuel department shall be registered voters in Arkansas. (c) (1) The Arkansas Racing Commission is authorized to examine the applications of all employees of any franchise holder, and if the franchise holder is found by the commission to have fewer than the required number of employees who are registered voters in Arkansas, then the franchise holder shall be allowed forty-eight (48) hours, when so ordered by the commission, to make the necessary adjustments in its employees so as to be in compliance with this section. (2) In the event the franchise holder fails or refuses to comply with a commission order, then it shall be guilty of a misdemeanor and upon conviction shall be fined not less than one hundred dollars ($100) nor more than five hundred dollars ($500). Acts 1969, No. 280, §§ 1-3; A.S.A. 1947, §§ 84-2761 -- 84-2763; Acts 2005, No. 1994, § 155.

(a) (1) Each franchise holder under this chapter shall require each of its employees to complete a written application for employment. Among other things, the application shall state: (A) Whether the applicant is a registered voter in Arkansas; and (B) If the applicant is a registered voter in Arkansas, the date on which the applicant became a registered voter in Arkansas. (2) Each application shall be signed by the applicant. If the information contained in the application is false, then the applicant shall be guilty of a misdemeanor and upon conviction shall be fined in an amount of not less than one hundred dollars ($100) nor more than five hundred dollars ($500).

(1) Each franchise holder under this chapter shall require each of its employees to complete a written application for employment. Among other things, the application shall state: (A) Whether the applicant is a registered voter in Arkansas; and (B) If the applicant is a registered voter in Arkansas, the date on which the applicant became a registered voter in Arkansas.

(A) Whether the applicant is a registered voter in Arkansas; and

(B) If the applicant is a registered voter in Arkansas, the date on which the applicant became a registered voter in Arkansas.

(2) Each application shall be signed by the applicant. If the information contained in the application is false, then the applicant shall be guilty of a misdemeanor and upon conviction shall be fined in an amount of not less than one hundred dollars ($100) nor more than five hundred dollars ($500).

(b) (1) At least eighty percent (80%) of the employees of each franchise holder under this chapter shall be registered voters in Arkansas, excluding employees in the franchise holder's pari-mutuel department and the following professional racing officials: (A) Stewards; (B) Judges; (C) Racing secretary; (D) Starter; (E) Clerk of scales; (F) Paddock judge; (G) Patrol judges; and (H) Identifier. (2) At least sixty percent (60%) of the employees in the franchise holder's pari-mutuel department shall be registered voters in Arkansas.

(1) At least eighty percent (80%) of the employees of each franchise holder under this chapter shall be registered voters in Arkansas, excluding employees in the franchise holder's pari-mutuel department and the following professional racing officials: (A) Stewards; (B) Judges; (C) Racing secretary; (D) Starter; (E) Clerk of scales; (F) Paddock judge; (G) Patrol judges; and (H) Identifier.

(A) Stewards;

(B) Judges;

(C) Racing secretary;

(D) Starter;

(E) Clerk of scales;

(F) Paddock judge;

(G) Patrol judges; and

(H) Identifier.

(2) At least sixty percent (60%) of the employees in the franchise holder's pari-mutuel department shall be registered voters in Arkansas.

(c) (1) The Arkansas Racing Commission is authorized to examine the applications of all employees of any franchise holder, and if the franchise holder is found by the commission to have fewer than the required number of employees who are registered voters in Arkansas, then the franchise holder shall be allowed forty-eight (48) hours, when so ordered by the commission, to make the necessary adjustments in its employees so as to be in compliance with this section. (2) In the event the franchise holder fails or refuses to comply with a commission order, then it shall be guilty of a misdemeanor and upon conviction shall be fined not less than one hundred dollars ($100) nor more than five hundred dollars ($500).

(1) The Arkansas Racing Commission is authorized to examine the applications of all employees of any franchise holder, and if the franchise holder is found by the commission to have fewer than the required number of employees who are registered voters in Arkansas, then the franchise holder shall be allowed forty-eight (48) hours, when so ordered by the commission, to make the necessary adjustments in its employees so as to be in compliance with this section.

(2) In the event the franchise holder fails or refuses to comply with a commission order, then it shall be guilty of a misdemeanor and upon conviction shall be fined not less than one hundred dollars ($100) nor more than five hundred dollars ($500).

Acts 1969, No. 280, §§ 1-3; A.S.A. 1947, §§ 84-2761 -- 84-2763; Acts 2005, No. 1994, § 155.
Ark. Code Ann. § 23-17-306 — AR Code / Title 23 / Chapter 17 / Subchapter 3 / Section 23-17-306
Allocation of fund
Status: in_force

(a) The Arkansas Public Service Commission shall allocate the Universal Telephone Service Fund among all local exchange carriers operating in Arkansas in such a manner as to moderate the disruptive effects of changes in methods of pricing of telephone services and to hold prices of local exchange telephone service to levels which will ensure, insofar as it is feasible to do so, that a maximum number of subscribers may maintain affordable local telephone service. (b) The allocation shall be made after a hearing at which all local exchange carriers and other interested parties may be heard and may be modified or adjusted by the commission, after hearing, at any time circumstances indicate a need for such modification. (c) The commission by rule may establish standard guidelines for allocation methodology. (d) The entire fund, after reasonable costs of administration are applied, shall be allocated among the local exchange carriers. Amended by Act 2019, No. 315,§ 2466, eff. 7/24/2019. Acts 1983, No. 483, § 5; A.S.A. 1947, § 73-2605.

(a) The Arkansas Public Service Commission shall allocate the Universal Telephone Service Fund among all local exchange carriers operating in Arkansas in such a manner as to moderate the disruptive effects of changes in methods of pricing of telephone services and to hold prices of local exchange telephone service to levels which will ensure, insofar as it is feasible to do so, that a maximum number of subscribers may maintain affordable local telephone service.

(b) The allocation shall be made after a hearing at which all local exchange carriers and other interested parties may be heard and may be modified or adjusted by the commission, after hearing, at any time circumstances indicate a need for such modification.

(c) The commission by rule may establish standard guidelines for allocation methodology.

(d) The entire fund, after reasonable costs of administration are applied, shall be allocated among the local exchange carriers.

Amended by Act 2019, No. 315,§ 2466, eff. 7/24/2019.

Acts 1983, No. 483, § 5; A.S.A. 1947, § 73-2605.
Ark. Code Ann. § 23-63-820 — AR Code / Title 23 / Chapter 63 / Subchapter 8 / Section 23-63-820
Investment trust securities
Status: in_force

An insurer may invest in the securities of any management-type investment company or investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as from time to time amended, if the investment company or trust has been organized for not less than two (2) years and has assets not less than fifty million dollars ($50,000,000) at the date of investment by the insurer. Acts 1959, No. 148, § 116; 1983, No. 522, § 8; A.S.A. 1947, § 66-2620.

An insurer may invest in the securities of any management-type investment company or investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as from time to time amended, if the investment company or trust has been organized for not less than two (2) years and has assets not less than fifty million dollars ($50,000,000) at the date of investment by the insurer.

Acts 1959, No. 148, § 116; 1983, No. 522, § 8; A.S.A. 1947, § 66-2620.