Arkansas Code of 1987 (2023) › Title 23 - PUBLIC UTILITIES AND REGULATED INDUSTRIES (§§ 23-1-101 — 23-119-105) › Subtitle 3 - INSURANCE (§§ 23-60-101 — 23-103-417) › Chapter 72 - MUTUAL ASSESSMENT LIFE AND DISABILITY INSURERS (§§ 23-72-101 — 23-72-122) › Section 23-72-119 - Merger or bulk reinsurance or conversion

(a)
(1)
Any mutual assessment domestic insurer may merge or reinsure its outstanding policies in bulk with any domestic stipulated premium insurer operating under §
23-71-101
et seq. and, upon filing with the Insurance Commissioner, an agreement setting out the conditions of the proposed merger or bulk reinsurance, and certifying that the agreement has been approved by the boards of directors of the respective merging insurers, together with a financial statement of each such insurer.
(2)
The merger shall be subject to the commissioner's approval, in accordance with the same standards as are stated in §
23-69-143
.
(3)
Upon approval, the membership or policyholders of the merged insurers are bound in all respects by the merger agreement as approved by the commissioner.
(b)
The domestic insurer may consolidate, merge, or bulk reinsure with any solvent legal reserve life insurer by proper resolution of its board of directors and pursuant to the commissioner's approval and applicable procedure provided by §§
23-69-143
-
23-69-145
, except that approval of the plans or agreement of merger or bulk reinsurance by members of any insurer involved may be dispensed with if the plan or agreement is otherwise approved by the commissioner.
(c)
A domestic insurer may convert into a legal reserve stock insurer under the procedures and conditions provided by §
23-69-141
, but the insurer shall be subject to minimum capital stock and maximum risk requirement as provided in §
23-71-116
for stipulated premium plan insurers and to subdivisions (d)(3) and (4) and subdivision (d)(6) of this section.
(d)
A domestic insurer may convert to a legal reserve mutual insurer under a plan filed with and approved by the commissioner as being reasonable, appropriate, and not injurious to the protection or interests of present or future policyholders of the insurer, subject to the following conditions:
(1)
The insurer's articles of incorporation shall be amended to provide for transaction of business on the mutual legal reserve basis;
(2)
When first so converted, the insurer shall have surplus funds of not less than fifty thousand dollars ($50,000). At the end of the fifth calendar year next succeeding the calendar year in which the insurer was so converted, its surplus shall be not less than seventy-five thousand dollars ($75,000). At the end of the tenth and subsequent calendar years, its surplus shall be not less than one hundred thousand dollars ($100,000);
(3)
The insurer shall write no new business on the assessment plan or reinstate any such business theretofore lapsed following the date of conversion;
(4)
Assessment plan business in force on the date of conversion may continue in force on the same plan. However, the insurer shall maintain separate accounts of its assessment plan business and its legal reserve business;
(5)
The maximum single risk retained by the insurer after conversion shall not exceed five percent (5%) of the insurer's surplus, until the surplus totals to one hundred thousand dollars ($100,000) or more; and
(6)
After conversion the insurer shall otherwise have the same powers and obligations as like legal reserve insurers under the Arkansas Insurance Code.
Acts 1959, No. 148, § 574; A.S.A. 1947, § 66-4519.