Arkansas Administrative Code › Agency 054 - Arkansas Insurance Department › Rule 054.00.12-002 - Rule 84 - Prepaid Funeral Benefits Contracts Recovery Fund Fees

Current through Register Vol. 49, No. 6, June, 2024
SECTION 1.
PURPOSE
The purpose of this Rule is to increase the five dollar ($5.00)
			 per contract fee charged on the sale of each prepaid funeral benefits contract
			 to ten dollars ($10.00) per contract. Pursuant to Ark. Code Ann. §
								23-40-119(d)(2)(A)(i),
			 the Commissioner may by rule or regulation eliminate, reduce, suspend or
			 increase the per-contract fee or the portion of the per-contract fee allotted
			 to the Prepaid Funeral Contracts Recovery Program Fund The per contract fees
			 fund the Prepaid Funeral Contracts Recovery Program, established under Ark.
			 Code Ann. §
								23-40-119(d),
			 to provide reparations to consumers in the event a prepaid funeral organization
			 becomes insolvent or has significant trust fund shortages. The Commissioner has
			 chosen to increase the per contract fee an additional five dollars ($5.00) to
			 increase the reserves of the fund to adequately safeguard against future,
			 significant trust fund shortages or insolvencies by prepaid funeral benefit
			 organizations. The Commissioner desires to impose a ten dollar ($10.00) fee for
			 five (5) years from the effective date of this Rule to meet current and
			 anticipated requests for potential reparation claims for purchasers from
			 organizations declared insolvent or found deficient under Ark. Code Ann. §
								23-40-119(f)(1)(A)
			 or Ark. Code Ann. §
								23-40-119(f)(1)(B).
SECTION 2.
AUTHORITY &
		  EFFECTIVE DATE
Authority for this Rule is given to the Insurance Commissioner
			 for the State of Arkansas by Ark. Code Ann. §
								23-40-119(d)(2)(A)(i)
			 which states that the Insurance Commissioner, on and after July 1, 2001, may by
			 rule or regulation eliminate, reduce, suspend, or increase the per-contract fee
			 or the portion of the per-contract fee allotted to the Prepaid Funeral
			 Contracts Recovery Program Fund. In addition, this Rule and Regulation is
			 promulgated and adopted by the Insurance Commissioner pursuant to the authority
			 vested in the Commissioner under Arkansas Code Annotated §§
								23-61-108 and
			 25-15-201, et
			 seq. Pursuant to the Commissioner's authority under Ark. Code Ann. §
								23-61-108,
			 §§
								25-15-201, et
			 seq., and other applicable laws and rules, the effective date of this Rule and
			 Regulation is January 1, 2013.
SECTION
		  3.
APPLICABILITY AND SCOPE
This Rule shall apply to all persons engaged in the business of
			 selling prepaid funeral benefits contracts under Ark. Code Ann. §
								23-40-101,
			 et seq., as amended by Act 852 of 1995.
SECTION 4.
PER CONTRACT FEE
		  AMOUNTS
Effective for all prepaid funeral benefits contracts executed on
			 and after January 1, 2013 until January 1, 2018, each licensee selling a
			 prepaid funeral benefits contract shall remit to the State Insurance Department
			 a one-time per-contract fee of not less than ten dollars ($10.00) for each
			 prepaid funeral benefits contract, including any amendments thereto, entered
			 into by the licensee whether cash or trust funded or funded by an insurance
			 policy or annuity contract. A five ($5.00) dollar increase in the per contract
			 fees is needed during the above described period, from January 1, 2013 to
			 January 1, 2018, to increase funds in the Prepaid Funeral Contracts Recovery
			 Program to safely meet potential reparation claims for purchasers from
			 organizations declared insolvent or found deficient under Ark. Code Ann. §
								23-40-119(f)(1)(A)
			 or Ark. Code Ann. §
								23-40-119(f)(1)(B).
			 For prepaid funeral benefit contracts executed after January 1, 2018, the
			 one-time per-contract fee shall revert to a fee of five dollars ($5.00)
			 per-contract.
SECTION 5.
SEVERABILITY
If any provision of this Rule and Regulation, or the application
			 thereof to any person or circumstance, is held invalid, such invalidity shall
			 not affect other provisions or applications of this Rule and Regulation which
			 can be given effect without the invalid provision or application, and to that
			 end the provisions of this Rule and Regulation are severable.