(a) There is continued at the seat of government of this state an office or department designated as the State Insurance Department.
(b) Suitable space shall be assigned for the use of the department.
(c)(1)(A) The purpose of the department is to serve and protect the public interest by the equitable enforcement of the state's laws and regulations affecting the insurance industry.
(B) The primary mission of the department shall be consumer protection through insurer solvency and market conduct regulation, and fraud prosecution and deterrence.
(2) Nothing in this subsection shall be construed to limit the Insurance Commissioner's authority as enumerated in other provisions of the Arkansas Insurance Code.
(a) The head of the State Insurance Department shall be an Insurance Commissioner appointed by the Governor with the advice and consent of the Senate. No person shall be eligible for appointment as commissioner unless a citizen of this state and at least thirty (30) years of age.
(b) The commissioner shall serve at the pleasure of the Governor.
(c) The commissioner shall take and subscribe to the usual oath of office.
(d) The commissioner shall receive the salary provided by law.
(e)(1) At the time of taking
office, the commissioner shall execute bond to the State of
(2) The form and surety of the bond shall be subject to the approval of the Governor and Auditor of State.
(3) An authorized surety insurer shall be the surety on the bond.
(f)(1) The commissioner shall have an official seal.
(2) All certificates issued by the commissioner shall bear his or her seal.
(3) Every document executed by the commissioner pursuant to law and bearing his or her official seal shall be received as evidence in any court or other tribunal and may be recorded in the same manner and with like effect as deeds regularly acknowledged.
(a) The Insurance Commissioner shall enforce the provisions of the Arkansas Insurance Code and shall execute the duties imposed upon him or her by the Arkansas Insurance Code.
(b) The commissioner shall have the powers and authority expressly conferred upon him or her by or reasonably implied from the provisions of the Arkansas Insurance Code.
(c) The commissioner is authorized to enter into regulatory cooperation and coordination agreements with other governmental regulatory agencies within and outside of this state with respect to the regulation of the business of insurance, including, but not limited to:
(1) Licensing of insurance companies;
(2) Licensing of producers;
(3) Regulation of premium rates and policy forms;
(4) Regulation of insurer solvency and insurance receiverships; and
(5) Other matters relating to the effective regulation of the business of insurance.
(d)(1) The commissioner may conduct such examinations and investigations of insurance matters, in addition to examinations and investigations expressly authorized, as he or she may deem proper to determine whether any person has violated any provision of the Arkansas Insurance Code or to secure information useful in the lawful administration of any such provision. The cost of these additional examinations or investigations shall be borne by the state.
(2) Notwithstanding any other provision of law, active investigatory or examination files as maintained by the State Insurance Department shall be deemed confidential and privileged and shall not be made open to the public until:
(A) The matter under investigation or examination is deemed closed by the commissioner; or
(B) Referred to any law enforcement authority and made subject to public disclosure by the authority.
(3) At such time that any matter investigated or examined has been set for an administrative hearing pursuant to § 23-61-304 or § 25-15-208, investigation or examination information shall be made available as provided in § 25-15-208.
(4) Unless otherwise exempted by subdivision (d)(5) of this section, actuarial formulas and assumptions certified by a qualified actuary are confidential and privileged when submitted to comply with a rate or form filing requirement of the department, including, but not limited to, any actuarial report:
(A) Required, submitted, or attached to any filing made to the department under § 23-67-211, for rate and form filings of an insurer, or to those submitted under § 23-63-216 for annual statements of an insurer; or
(B) Submitted to the department to comply with any form and rate filing requirement imposed by statute or rule upon licensed insurers, health maintenance organizations, fraternal benefit societies, and hospital and medical service corporations.
(5)(A) Subdivisions (d)(2) and (d)(4) of this section do not prohibit release by the commissioner of active investigatory or examination files:
(i) At the discretion of the commissioner, to a person or persons that the commissioner determines to be aggrieved or affected by the examination or investigation; or
(ii) To state, federal, or local law enforcement or regulatory agencies or private organizations established for tracking or preventing insurance violations, or to the National Association of Insurance Commissioners.
(B) This section shall have no effect on or application to any of the filings gathered or compiled in compliance with § 23-63-1201 et seq.
(6) Release of active investigatory or examination files under subdivision (d)(5) of this section does not abrogate or modify the confidential nature of investigatory or examination files under subdivision (d)(2) of this section.
(e)(1) The commissioner may delegate to any assistant, deputy, examiner, or employee of the department the exercise or discharge in the commissioner's name of any power, duty, or function, whether ministerial, discretionary, or of whatever character which may be vested by the Arkansas Insurance Code in the commissioner.
(2) The commissioner shall be responsible for the official acts of his or her deputy, assistant, examiner, or employee acting in the commissioner's name and by his or her authority.
(f)(1)(A) To the extent not otherwise governed by the Trade Practices Act, § 23-66-201 et seq., § 23-65-101 et seq., or a law or rule providing specific injunctive powers to the commissioner, if it appears to the commissioner upon sufficient grounds or evidence that any person has engaged in or is about to engage in any act or practice constituting a violation of an insurance law, rule, or order of this state, the commissioner may summarily order the person to cease and desist from the act or practice.
(B)(i) Upon the entry of the cease and desist order under subdivision (f)(1)(A) of this section, the commissioner shall promptly notify the person who is the subject of the order:
(a) That the order has been entered; and
(b) Of his or her right to a hearing concerning the order.
(ii) The notification shall include a copy of the order or a detailed statement of the reasons for the order.
(2)(A) A hearing shall be held under § 23-61-301 et seq. on the written request of the person aggrieved by the cease and desist order under subdivision (f)(1)(A) of this section if the request is received by the commissioner within thirty (30) days of the date of the entry of the order or if ordered by the commissioner.
(B) If no hearing is requested and none is ordered by the commissioner, the order shall remain in effect until it is modified or vacated
by the commissioner.
(C) If a hearing is requested or ordered, the commissioner after notice and opportunity for hearing:
(i) May affirm, modify, or vacate the order; and
(ii) Shall conduct the hearing within ten (10) days of the date a hearing is requested or ordered by the commissioner.
(3)(A) After issuance of an order under this subsection, the commissioner may apply to the Pulaski County Circuit Court to temporarily or permanently enjoin the act or practice and to enforce compliance with the insurance laws of this state.
(B) However, without issuing such an order, the commissioner may apply directly to the Pulaski County Circuit Court for relief.
(4) Upon a proper showing, a permanent or temporary injunction, restraining order, or writ of mandamus shall be granted.
(5)(A) The commissioner may also seek and the appropriate court shall grant, upon proper showing, any other ancillary relief that may be in the public interest.
(B) The relief may include:
(i) The appointment of a receiver, temporary receiver, or conservator;
(ii) A declaratory judgment;
(iii) An accounting;
(iv) A disgorgement of profits;
(v) The assessment of a fine not to exceed the total amount of money, property, or other value received in connection with an
insurance law violation; or
(vi) Any other relief appropriate to protect the public interest.
(6) The commissioner is not required to post a bond as a condition for obtaining relief under this subsection.
(7) This subsection does not prohibit or restrict the informal disposition of a proceeding or allegations that might give rise to a proceeding by stipulation, settlement, consent, or default in lieu of a formal or informal hearing on the allegations or in lieu of the sanctions authorized by this subsection.
(a) The Insurance Commissioner may appoint such assistants and deputies and such examiners, attorneys, clerks, stenographers, and other personnel as may be necessary to assist him or her in the discharge of the duties imposed upon him or her under the Arkansas Insurance Code and as may be authorized by law. All such personnel shall devote their entire business time to their duties in the State Insurance Department.
(b) The commissioner may employ an actuary on a consulting or full-time basis to perform such duties as the commissioner may designate.
(c) The commissioner may at any time terminate the appointment, designation, or employment of any assistant, deputy, examiner, attorney, actuary, clerk, or other employee.
(d) The compensation for all such personnel so appointed or employed shall be as fixed by law.
(e) The commissioner may contract for and procure on a basis of fee such independently contracting examination, actuarial, technical, and other professional services as he or she may from time to time require for the discharge of his or her duties.
(a) In addition to compensation for their services, the Insurance Commissioner, his or her deputies, assistants, and other employees shall be paid their actual and necessary expenses as authorized by the commissioner and incurred by them in the performance of their duties, subject to such limitations as may be otherwise applicable pursuant to law.
(b) An itemized statement of all expenses for which payment is being claimed shall be certified by the claimant and attached to the expense voucher.
(a) The Insurance Commissioner or any deputy, examiner, assistant, or employee of the commissioner shall not be financially interested, directly or indirectly, in any insurer, insurance agency, or insurance transaction, except as:
(1) A policyholder or claimant under a policy;
(2) A grantor of a mortgage or similar instrument on such person's residence to an entity regulated under the Arkansas Insurance Code if done under customary terms and in the ordinary course of business; or
(3) A settlor or beneficiary of a blind trust into which any otherwise impermissible holdings have been placed, provided that the commissioner may make reasonable exceptions upon full and complete written disclosure to the commissioner of the exact nature and extent of the otherwise impermissible financial interest and adhering to any and all reasonable restrictions as the commissioner may impose upon the terms and conditions of employment.
(b) Notwithstanding the requirements of subsection (a) of this section, the commissioner may employ or retain, from time to time, insurance actuaries, technicians, or other professional personnel who are independently practicing their professions even though similarly employed or retained by insurers or others.
(c) The commissioner or any assistant, deputy, examiner, or other employee of the commissioner shall not be given nor receive any fee, compensation, loan, gift, or other thing of value in addition to the compensation and expense allowance provided pursuant to law for any service rendered or to be rendered as commissioner, deputy, examiner, or employee, or in connection therewith.
(a)(1) The Insurance Commissioner shall enter, in permanent form, records of his or her official transactions, examinations, investigations, and proceedings and keep these records in his or her office.
(2) These records and insurance filings in his or her office shall be open to public inspection, except as otherwise provided in the Arkansas Insurance Code with respect to particular records or filings.
(3) Confidential data and reports provided to the commissioner by the National Association of Insurance Commissioners, including, but not limited to, insurers' Insurance Regulatory Information System ratios and examiner team synopses, shall be deemed privileged communications. These data and reports shall not be open to public inspection and shall not be admissible in evidence in any action or proceeding, other than those brought by the commissioner, nor shall any insurers, agents, or brokers, which may be the subject of the confidential reports, have a cause of action against the commissioner or his or her deputies, examiners, assistants, or employees or against the National Association of Insurance Commissioners, or its members, subscribers, officers, directors, assistants, or employees by reason of the furnishing of any such information to the commissioner.
(4) The commissioner shall maintain as confidential, and not subject to subpoena, financial information regarding material transactions of insurers, as defined in § 23-63-1403 or other applicable laws or regulations promulgated by the commissioner.
(5)(A) In order to assist in the performance of the commissioner's duties, the commissioner may:
(i) Share documents, materials, or other information, including confidential and privileged documents, materials, or information, with other state, federal, and international regulatory and legislative agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, communication, or other information;
(ii) Receive documents, materials, communications, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory, legislative, and law enforcement officials of other foreign, alien, or domestic jurisdictions, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and
(iii) Enter into agreements governing sharing and use of information consistent with this subsection.
(B) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized by this subsection.
(C) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection shall be available and enforced in any proceeding in, and in any court of, this state.
(b) The commissioner may destroy or otherwise dispose of records and filings in his or her office in accordance with such rules and procedures as provided by other applicable laws.
(c)(1) Upon request of any person and upon payment of the applicable fee, the commissioner shall give a certified copy of any record in his or her office which is then open to public inspection.
(2) Copies of original records or documents in his or her office certified by the commissioner shall be received in evidence in all courts as if they were originals.
(3) The commissioner's certificate as to the authority of any person to transact insurance shall be evidence in all courts of the facts set forth therein.
(d) In lieu of original signatures of records and filings, as required by pertinent provisions of the Arkansas Insurance Code, which are permitted to be reproduced in electronic, diskette, or computer-readable form acceptable to the commissioner, the commissioner in his or her discretion may accept electronic, electronic facsimile-transmitted, or computer-readable signatures subject to such conditions and terms as he or she may determine.
(a)(1) The Insurance Commissioner may make reasonable rules and regulations necessary for or as an aid to the effectuation of any provision of the Arkansas Insurance Code.
(2) No rule or regulation shall extend, modify, or conflict with any law of this state or the reasonable implications thereof.
(3) Any rule or regulation affecting persons or matters other than the personnel or the internal affairs of the commissioner's office shall be made or amended only after a hearing thereon of which notice was given as required by § 23-61-304.
(4) If reasonably possible, the commissioner shall set forth the proposed rule or regulation or amendment in or with the notice of hearing.
(5) No rule or regulation as to which a hearing is required under this subsection shall be effective until after it has been on file as a public record in the commissioner's office, and otherwise as provided by law, for at least ten (10) days.
(b)(1) The commissioner shall have the authority to promulgate rules and regulations necessary for the effective regulation of the business of insurance or as required for this state to be in compliance with federal laws.
(2) The commissioner shall have the authority to coordinate regulatory activities and administration with other states and their appropriate regulatory officials and with the federal government with respect to the regulation of insurance.
(c) In addition to any other penalty provided, willful violation of any rule or regulation shall subject the violator to such denial, suspension, or revocation of certificate of authority or license as may be applicable under the Arkansas Insurance Code for violation of the provision to which the rule or regulation relates.
(d)(1) The commissioner is authorized to employ the standards and requirements set forth in publications recited in the Arkansas Insurance Code, as those publications existed on January 1, 2001, and adopted and published by the National Association of Insurance Commissioners or by other authors in the regulation of insurance, including, but not limited to, the Valuation of Securities Manual, the Examiners Handbook, the Accounting Practices and Procedures Manual, and the Annual Statement Instructions as published by the National Association of Insurance Commissioners.
(2) The publications identified in subdivision (d)(1) of this section and others recited in and throughout § 23-60-101 et seq. are hereby adopted as they existed on January 1, 2001.
(3) The commissioner is authorized and empowered to promulgate regulations for the purposes of adopting all or part of other publications of the National Association of Insurance Commissioners or publications by other authors if the commissioner determines that such an action is in the best interest of the public.
(4) Upon the mailing of written notice by the commissioner to all domestic reporting entities of promulgation and publication by the National Association of Insurance Commissioners or other authors of amendments, revisions, or modifications to any publication previously adopted by the commissioner in the Arkansas Insurance Code, such published amendments, revisions, or modifications shall become effective on the date designated by the commissioner in the written notice, which date shall not be earlier than eight (8) months after the date of mailing of the notice.
(e) The commissioner is authorized and empowered to adopt regulations for the purpose of modifying, amending, or revising any publication promulgated by the National Association of Insurance Commissioners or other authors, or any published amendments, modifications, or revisions to any such publications if the commissioner determines that such an action is in the best interest of the public. In such an event the effective date of any modification, amendment, or revision shall be the effective date of the regulation.
(a) Orders and notices of the Insurance Commissioner shall be effective only when in writing signed by the commissioner by his or her authority.
(b) Every order shall state its effective date and shall concisely state:
(1) Its intent or purpose;
(2) The grounds on which based; and
(3) The provisions of the Arkansas Insurance Code pursuant to which action is taken or proposed to be taken, but failure to so designate all applicable provisions shall not deprive the commissioner of the right to rely thereon.
(c) Except as may be provided in the Arkansas Insurance Code respecting particular procedures, an order or notice may be given by service upon or delivery to the person to be ordered or notified or by mailing it, postage prepaid, addressed to the person at his or her principal place of business as last of record in the department.
(a)(1)(A) The Insurance Commissioner may institute such suits or other legal proceedings as may be required for enforcement of any provisions of the Arkansas Insurance Code.
(B) In addition, the commissioner may intervene in any civil suit or administrative hearing initiated by another party against any person or entity regulated by the commissioner under the Arkansas Insurance Code, which suit or proceeding directly relates to the financial condition and solvency of such a person or entity.
(C) Nothing in this subsection shall be construed to limit the commissioner's authority as enumerated in other provisions of the Arkansas Insurance Code.
(2) If the commissioner has reason to believe that any person has violated any provision of the Arkansas Insurance Code for which criminal prosecution would be in order, he or she shall so inform the prosecuting attorney in whose district any purported violation may have occurred or the Criminal Investigation Division.
(3) If the commissioner finds that any person has violated any provision of the Arkansas Insurance Code, he or she may order restitution of actual losses to affected persons in addition to the denial, suspension, or revocation of any license or certificate or the imposition of any administrative or civil penalty.
(b) The commissioner may proceed in the courts of this state or any reciprocal state to enforce an order or decision in any court proceeding or in any administrative proceeding before the commissioner.
(a) As used in this section and § 23-61-110:
(1) “Foreign decree” means any decree or order in equity of a court located in a reciprocal state, including a court of the United States located therein, against any insurer incorporated or authorized to do business in this state; and
(2) “Reciprocal state” means any state or territory of the United States the laws of which contain procedures substantially similar to those specified in this section for the enforcement of decrees or orders in equity issued by the courts located in other states or territories of the United States against any insurer incorporated or authorized to do business in the state or territory.
(b) The Insurance Commissioner shall determine which states and territories qualify as reciprocal states and shall maintain at all times an up-to-date list of the states.
(c)(1) A copy of any foreign decree authenticated in accordance with the statutes of this state may be filed in the office of the clerk of any circuit court of this state.
(2) The clerk, upon verifying with the commissioner that the decree or order qualifies as a foreign decree shall treat the foreign decree in the same manner as a decree of a circuit court of this state.
(3) A foreign decree so filed has the same effect and shall be deemed as a decree of a circuit court of this state. The decree is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a decree of a circuit court of this state and may be enforced or satisfied in like manner.
(d)(1) At the time of the filing of the foreign decree, the commissioner shall make and file with the clerk of the court an affidavit setting forth the name and last known post office address of the defendant.
(2) Promptly upon the filing of the foreign decree and the affidavit, the clerk shall mail notice of the filing of the foreign decree to the defendant at the address given and to the commissioner of this state and shall make a note of the mailing in the docket. In addition, the commissioner may mail a notice of the filing of the foreign decree to the defendant and file proof of mailing with the clerk. Lack of mailing notice of filing by the clerk shall not affect the enforcement proceedings if proof of mailing by the commissioner has been filed.
(3) No execution or other process for enforcement of a foreign decree filed pursuant to this section shall issue until thirty (30) days after the date the decree is filed.
(e)(1) If the defendant shows the circuit court that an appeal from the foreign decree is pending or will be taken, or that a stay of execution has been granted, the court shall stay enforcement of the foreign decree until the appeal is concluded, the time for appeal expires, or the stay of execution expires or is vacated, upon proof that the defendant has furnished the security for the satisfaction of the decree required by the state in which it was rendered.
(2) If the defendant shows the circuit court any ground upon which enforcement of a decree of any circuit court of this state would be stayed, the court shall stay enforcement of the foreign decree for an appropriate period, upon requiring the same security for satisfaction of the decree which is required in this state.
(f) Any person filing a foreign judgment or decree shall pay to the clerk of the court the fee prescribed in § 21-6-402. Fees for docketing, transcription, or other enforcement proceedings shall be as provided for judgment or decrees of the circuit court of this state.
As early in the calendar year as reasonably possible, the Insurance Commissioner annually shall prepare and deliver a report to the Governor showing, with respect to the preceding calendar year:
(1) Names of the authorized insurers transacting insurance in this state, with such summary of their financial statements as the commissioner deems proper;
(2) Names of insurers whose businesses were closed during the year, the cause thereof, and the amount of assets and liabilities as ascertainable;
(3) Names of insurers against which delinquency or similar proceedings were instituted and a concise statement of the facts with respect to each proceeding;
(4) The receipts and expenses of the State Insurance Department for the year;
(5) Recommendations of the commissioner as to amendments or supplementation of laws affecting insurance and as to matters affecting the department; and
(6) Such other pertinent information and matters as the commissioner deems proper.
(a) No person shall disclose any nonpublic personal information contrary to the provisions of Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102.
(b) The Insurance Commissioner shall adopt rules and regulations governing the treatment of consumer financial and protected health information by the Arkansas Comprehensive Health Insurance Pool and by all licensed insurers, health maintenance organizations, or other insuring health entities regulated by the commissioner, producers, and other persons licensed or required to be licensed, authorized or required to be authorized, or registered or required to be registered by the commissioner.
(c)(1) The commissioner shall waive any provision of this section that creates any conflict with similar federal laws or regulations, or which, due to the enactment of any such similar federal laws or regulations, creates an undue burden or increased financial or operational demands upon any person or entity referenced in subsection (b) of this section in order to comply with this section, the regulations to be promulgated by the commissioner, and similar federal laws and regulations.
(2) Any person or entity referenced in subsection (b) of this section may request a hearing before the commissioner to seek the waiver referenced in subdivision (c)(1) of this section.
(3)(A) Under § 23-61-307, any person or entity referenced in subsection (b) of this section is entitled to appeal the commissioner's decision to deny a waiver.
(B) In any appeal pursuant to this section, the commissioner shall be named as defendant.
(C) In any such action, the commissioner may but shall not be obligated to defend the action, in his or her discretion.
(a) The Insurance Commissioner
shall conduct an annual study of malpractice insurance rates in
(b) The study shall include:
(1) Any findings regarding any changes in medical malpractice rates;
(2) Any other finding that is relevant to malpractice insurance rates; and
(3) Any recommendations in respect to any law relating to medical malpractice insurance.
(c) The report shall be submitted no later than August 1 subsequent to the year studied.
(a) The principles expressed in subsection (b) of this section shall serve as standards to be followed by the Insurance Commissioner in:
(1) Exercising the commissioner's powers and duties;
(2) Exercising administrative discretion;
(3) Dispensing administrative interpretations of the law; and
(4) Adopting rules and regulations.
(b) Policyholders shall have the right to:
(1) Competitive pricing practices and marketing methods that enable them to determine the best value among comparable policies;
(2) Insurance advertising and other selling approaches that provide accurate and balanced information on the benefits and limitations of a policy;
(3) An insurer that is financially stable;
(4) Be serviced by a competent, honest insurance producer;
(5) A readable policy;
(6) An insurer that provides an economic delivery of coverage and that tries to prevent losses; and
(7) Balanced and positive regulation by the State Insurance Department.
(c) This section shall not be construed as creating, extinguishing, repealing, or limiting any civil cause of action.
(a)(1) The
Insurance Commissioner shall examine the affairs, transactions, accounts,
records, market conduct activity, and assets of each authorized insurer as
often as in the commissioner's sole discretion he or she deems advisable.
(2) The commissioner shall so examine each authorized insurer not less frequently than every five (5) years.
(3) Examination of an alien insurer shall be
limited to its insurance transactions and affairs in the
(4) In scheduling and determining the nature, scope, and frequency of the examinations, the commissioner shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, and other criteria as set forth in the most current edition of the applicable Examiners' Handbook and other standards adopted by the National Association of Insurance Commissioners and in effect when the commissioner exercises discretion to conduct an examination under subdivision (a)(1) of this section.
(b) The commissioner may, in like manner, examine each insurer applying for an initial certificate of authority to transact insurance in this state.
(c) In lieu of making his or her own examination of any foreign or alien insurer authorized in this state, the commissioner may, in his or her discretion, accept a full report of the last recent examination of a foreign or alien insurer as prepared by the insurance department for the company's state of domicile or port-of-entry state. After January 1, 1994, such reports may only be accepted by the commissioner if:
(1) The insurance department preparing such report was at the time of the examination accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program; or
(2) The examination was performed with the participation of one (1) or more examiners employed by such an accredited state insurance department, who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their accredited insurance department.
(d) As far as practical, the examination of a foreign or alien insurer shall be made in cooperation with the insurance supervisory officials of other states in which the insurer transacts business.
For the purposes of completing an examination of any company under this subchapter, the Insurance Commissioner may, as often as he or she deems advisable, examine or investigate any person, or the business of any person, insofar as such an examination or investigation is, in the sole discretion of the commissioner, necessary or material to the examination of the company.
(a) Upon determining that an examination should be conducted, the Insurance Commissioner shall issue an examination certificate of authority appointing one (1) or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the most current edition of the applicable Examiners' Handbook adopted by the National Association of Insurance Commissioners. The commissioner may also employ such other guidelines or procedures as the commissioner may deem appropriate.
(b) When making an examination under this subchapter, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, the cost of which shall be borne by the company which is the subject of the examination.
(c)(1) The commissioner may also accept as a part of the State Insurance Department's examination of any insurer or person:
(A) A report by an independent actuary deemed competent by the commissioner; or
(B) A report of an audit made by an independent certified public accountant.
(2) Neither those persons so designated nor any members of their immediate families shall be officers of, connected with, or financially interested in any insurer other than as policyholders, nor shall they be financially interested in any other corporation or person affected by the examination, investigation, or hearing.
(a)(1) Every company or person from whom information is sought, its officers, directors, and agents, must provide to the examiners appointed under § 23-61-203 timely, convenient, and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business, and affairs of the company being examined. The officers, directors, employees, and agents of the company or person must facilitate such an examination and aid in such an examination so far as it is in their power to do so.
(2) The refusal of any company, by its officers, directors, employees, or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension, revocation, or refusal of, or nonrenewal of, any license or authority held by the company to engage in an insurance or other business subject to the Insurance Commissioner's jurisdiction. Any such proceedings for suspension, revocation, or refusal of any license or authority shall be conducted pursuant to § 23-63-213.
(b) If the commissioner finds the accounts to be inadequate or inadequately kept or posted, he or she may employ experts to rewrite, post, or balance them at the expense of the person being examined if the person has failed to complete or correct the accounting after the commissioner has given the person notice and a reasonable opportunity to do so.
(c)(1) If the commissioner deems it necessary to value any property involved in an examination, he or she may make written request of the person being examined to appoint one (1) or more competent appraisers, approved by the commissioner, for the purpose of appraising the property.
(2) If no appointment is made within ten (10) days after this request was delivered to the person, then the commissioner may appoint the appraiser or appraisers.
(3) Any such appraisal shall be promptly made, and a copy of the report shall be furnished to the commissioner.
(4) The reasonable expense of the appraisal shall be borne by the person being examined.
(d) Nothing contained in this subchapter shall be construed to limit the commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action.
(e) Nothing contained in this subchapter shall be construed to limit the commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the commissioner may, in his or her sole discretion, deem appropriate.
(a)(1) The Insurance Commissioner or his or her examiner shall make a full and true written report of each examination, which shall comprise only facts appearing upon the books, records, or other documents of the insurer, its agents, or other persons examined, or as ascertained from the sworn testimony of its officers or agents or other persons examined concerning its affairs, and shall include such conclusions and recommendations as may reasonably be warranted from the facts.
(2) No later than sixty (60) days following completion of the examination, the examiner in charge shall file with the State Insurance Department a verified written report of the examination under oath. Upon receipt of the verified report, the department shall transmit the report to the company examined, together with a notice which shall afford the company examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report.
(3) Within thirty (30) days after the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiners' work papers, and enter an order:
(A) Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation, or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure such a violation;
(B) Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, or information, and refiling pursuant to subdivision (a)(2) of this section; or
(C) Calling for an investigatory hearing with no less than twenty (20) days' notice to the company for purposes of obtaining additional documentation, data, information, and testimony.
(b)(1) All orders entered pursuant to subdivision (a)(3)(A) of this section shall be accompanied by findings and conclusions resulting from the commissioner's consideration and review of the examination report, relevant examiner work papers, and any written submissions or rebuttals. Any such order shall be considered a final administrative decision and may be appealed, pursuant to § 23-61-307, and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within twenty (20) days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.
(2) Any hearing conducted under subdivision (a)(3)(C) of this section by the commissioner or authorized representative shall be conducted as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the commissioner's review of relevant work papers or by the written submission or rebuttal of the company. Within thirty (30) days of the conclusion of any such hearing, the commissioner shall enter an order pursuant to subdivision (a)(3)(A) of this section.
(3) The hearing shall proceed expeditiously with discovery by the company limited to the examiner's work papers which tend to substantiate any assertions set forth in any written submission or rebuttal. The commissioner may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation, whether under the control of the department, the company, or other persons. The documents produced shall be included in the record, and testimony taken by the commissioner or his or her representative shall be under oath and preserved for the record at the cost of the company. Nothing contained herein shall require the department to disclose any information or records which would indicate or show the existence or content of any investigation or activity of a criminal justice agency.
(c) Upon the adoption of the examination report under subdivision (a)(3)(A) of this section, the commissioner shall continue to hold the content of the examination report as private and confidential information for a period of thirty (30) days from the date the company received by United States mail or by electronic mail the order issued by the commissioner to adopt the examination report, except to the extent provided in subdivision (a)(2) of this section. Thereafter, the commissioner may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication.
(d) Nothing contained in this subchapter shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the insurance department of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this subchapter.
(a) Each person so examined shall pay to the State Insurance Department the actual travel expenses, reasonable living expense allowance, and compensation for examiners and other persons assisting in the examination on a basis not to exceed the total of the Geographical Expense Reimbursement Plan set forth in the most current edition of the applicable Examiners' Handbook adopted by the National Association of Insurance Commissioners, upon presentation of a detailed account of the charges and expenses.
(b)(1) Payments for travel expenses and living expense allowance received by the department for each examination shall be deposited as cash funds.
(2) Reimbursement shall be made from these funds to examiners and others assisting in the examination.
(3) Per diem charges of examiners and others assisting in the examination shall be computed beginning at the time of reporting for duty at the office of the company to be examined and terminating upon completion of the examination or the examiner's active participation therein and to include actual days for travel as certified by the Insurance Commissioner. If air travel is used, only one (1) day's travel time will be authorized. If an automobile is used, travel time allowed shall be computed at the rate of not less than four hundred (400) miles per day as determined by the Rand McNally Road Map, with the actual mileage traveled compensated at the most current rate per mile approved for state employees.
(4) Examiners and others assisting in the examination shall not be reimbursed for travel time or travel expenses not actually incurred in connection with an assignment, nor shall they be reimbursed for dual living expenses while on branch office assignments.
(5) Examiners and others assisting in the examination, when participating in or conducting an examination of a foreign company, shall be authorized to return to their state of domicile every other weekend. Their expenses will be paid based upon the lesser of airfare or mileage. The reimbursement shall be made in lieu of the per diem allowance. The travel shall be accomplished with a minimum amount of work time lost.
(c) Payments for employee compensation received by the department shall be deposited by the commissioner into the State Treasury to be credited to the State Insurance Department Trust Fund used for the maintenance, operation, and support of the department.
(d) No person shall pay, and no examiner shall accept, any additional emolument on account of any examination.
All working papers, recorded information, documents, and copies produced by, obtained by, or disclosed to the Insurance Commissioner or any other person in the course of an examination made under this subchapter must be given confidential treatment and are not subject to subpoena and may not be made public by the commissioner or any other person, except to the extent provided in § 23-61-205. In addition, all workpapers, financial statement analyses, ratio calculations, and any other materials produced by State Insurance Department financial examiners or analysts, or documents submitted or disclosed to the department by an insurer in response to a request from the commissioner or a department financial examiner or analyst during the course of reviewing or investigating the financial solvency, condition, or affairs of an insurer, shall be confidential and not subject to subpoena, except to the extent as provided in § 23-61-205. Access may also be granted to the National Association of Insurance Commissioners. The parties must agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this section, unless the prior written consent of the company to which it pertains has been obtained.
(a) No cause of action shall arise nor shall any liability be imposed against the Insurance Commissioner, the commissioner's authorized representatives, or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this subchapter.
(b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner's authorized representative or examiner pursuant to an examination made under this subchapter, if such an act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.
(c) This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection (a) of this section.
(d) A person identified in subsection (a) of this section shall be entitled to an award of attorney's fees and costs, if that person is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of his or her activities in carrying out the provisions of this subchapter, and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is “substantially justified” if it had a reasonable basis in law or fact at the time it was initiated.
(a) With
respect to the subject of any examination, investigation, or hearing being
conducted by the Insurance Commissioner, the commissioner may subpoena
witnesses and administer oaths or affirmations and examine any individual under
oath and may require and compel the production of records, books, papers,
contracts, and other documents.
(b)(1) Witness fees and mileage shall not be allowed as to any licensee of the commissioner.
(2) Witness fees and mileage of persons or entities not licensees of the commissioner, if claimed, shall be allowed the same as for testimony in a circuit court. Provided, however, that such a claim must be made at the time, date, and place of the hearing to which the person or entity has been summoned, and the amount thereof shall be processed in the same manner as are State Insurance Department employees' requests for expense reimbursement from the State of Arkansas.
(3) Witness fees, mileage, and the actual expense necessarily incurred in securing attendance of witnesses and their testimony shall be itemized and shall be paid by the person being examined or investigated if, in the proceedings in which the witness is called, the person is found to have been in violation of the law, or paid by the person, if other than the commissioner, at whose request the hearing is held.
(c)(1) Subpoenas of witnesses shall be served in the same manner as if issued by a circuit court and may be served by certified mail.
(2) If any individual fails to obey a subpoena issued and served pursuant to this section with respect to any matter concerning which he or she may be lawfully interrogated, upon application of the commissioner, the circuit court of the county in which is pending the proceeding at which the individual was required to appear may issue an order requiring the individual to comply with the subpoena and to testify.
(3) Any failure to obey the order of the court may be punished by the court as a contempt thereof.
(d) If any officer, director, or manager of an insurer has refused, in connection with examination of the insurer by the commissioner, to be examined under oath concerning its affairs, then the commissioner is authorized to conduct and enforce by all appropriate and available means any examination under oath in any state or territory of the United States in which any officer, director, or manager may then presently be to the full extent permitted by the laws of the state or territory, this special authorization considered.
(e) Any person willfully testifying falsely under oath in this state as to any matter material to any examination, investigation, or hearing shall, upon conviction, be guilty of perjury and punished accordingly.
(a)(1) If any person asks to be excused from attending or testifying or from producing any books, papers, records, correspondence, or other documents at or in connection with any examination, hearing, or investigation being conducted by the Insurance Commissioner or his or her examiner on the ground that the testimony or evidence required of the person may tend to incriminate the person or subject him or her to a penalty or forfeiture and shall, notwithstanding, be directed to give the testimony or produce the evidence, the person must nonetheless comply with the direction, but he or she shall not thereafter be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he or she may testify or produce evidence pursuant thereto.
(2) No testimony so given or evidence produced shall be received against him or her upon any criminal action, investigation, or proceeding, except that no individual so testifying shall be exempt from prosecution or punishment for any perjury committed by him or her while testifying and the testimony or evidence so given or produced shall be admissible against him or her upon any criminal action, investigation, or proceeding concerning the perjury; nor shall he or she be exempt from the refusal, suspension, or revocation of any license, permission, or authority conferred, or to be conferred, pursuant to the Arkansas Insurance Code.
(b)(1) Any such individual may execute, acknowledge, and file in the State Insurance Department a statement expressly waiving immunity or privilege in respect to any transaction, matter, or thing specified in the statement, and, thereupon, the testimony of the person or the evidence in relation to the transaction, matter, or thing may be received or produced before any judge or justice, court, tribunal, grand jury, or otherwise.
(2) If so received or produced, the individual shall not be entitled to any immunity or privilege on account of any testimony he or she may so give or evidence so produced.
(a) The Insurance Commissioner may hold hearings for any purpose within the scope of the Arkansas Insurance Code deemed by him or her to be necessary.
(b)(1) The commissioner shall hold a hearing if required by any provision or upon written demand for a hearing by a person aggrieved by any act, threatened act, or failure of the commissioner to act, or by any report, rule, regulation, or order of the commissioner, other than an order for the holding of a hearing, or an order on hearing or pursuant thereto.
(2) Any demand shall specify the grounds to be relied upon as a basis for the relief to be demanded at the hearing, and, unless postponed by mutual consent, the hearing shall be held within thirty (30) days after receipt by the commissioner of the demand.
(c) Pending the hearing and decision thereon, the commissioner may suspend or postpone the effective date of the commissioner's previous action.
(a) Not less than ten (10) days in advance, the Insurance Commissioner shall give notice of the time and place of the hearing, stating the matters to be considered at the hearing.
(b) If the persons to be given notice are not specified in the provisions pursuant to which the hearing is held, the commissioner shall give notice to all persons to be directly and immediately affected by the hearing.
(a) Hearings may be closed to the public at the Insurance Commissioner's discretion, except that a hearing shall be open to the public if so requested in writing by any party to the hearing.
(b) The commissioner shall allow any party to the hearing to appear in person and by counsel, to be present during the giving of all evidence, to have a reasonable opportunity to inspect all documentary evidence and to examine witnesses, to present evidence in support of his or her interest, and to have subpoenas issued by the commissioner to compel attendance of witnesses and production of evidence in his or her behalf.
(c) The commissioner shall permit to become a party to the hearing by intervention, if timely, only those persons who were not original parties to the hearing and whose pecuniary interests are to be directly and immediately affected by the commissioner's order made upon the hearing.
(d) Formal rules of pleading or evidence need not be observed at any hearing.
(e)(1) Upon written request timely made by a party to the hearing and at that person's expense, the commissioner shall cause a full stenographic record of the proceedings to be made by a competent reporter.
(2) If transcribed, a copy of the stenographic record shall be furnished to the commissioner. Notwithstanding the provisions of the Arkansas Administrative Procedure Act, § 25-15-201 et seq., the transcribed stenographic record shall be furnished to the commissioner without cost to the commissioner or the state and shall be a part of the commissioner's record of the hearing.
(3) If so transcribed, a copy of the stenographic record shall be furnished to any other party to the hearing at the request and expense of the other party.
(4) If no stenographic record is made or transcribed, the commissioner shall prepare an adequate record of the evidence and of the proceedings.
(f) Upon written request of a party to a hearing filed with the commissioner within thirty (30) days after any order made pursuant to a hearing has been mailed or delivered to the persons entitled to receive the order, the commissioner, in his or her discretion, may grant a rehearing or reargument of the matters involved in the hearing, and notice of the rehearing or reargument shall be given as provided in § 23-61-304.
(a) In the conduct of any hearing under the Arkansas Insurance Code and making his or her order thereon, the Insurance Commissioner shall act in a quasi-judicial capacity.
(b) Within thirty (30) days after termination of the hearing or of any rehearing thereof or reargument thereon, the commissioner shall make his or her order on hearing, covering matters involved in that hearing and in any rehearing or reargument and shall give a copy of the order to the same persons given notice of the hearing and to all parties to the hearing.
(c) The order shall contain a concise statement of the facts as found by the commissioner and of his or her conclusions from those facts and the matters required by § 23-61-109.
(d) The order may affirm, modify, or nullify action theretofore taken and may constitute the taking of new action within the scope of the notice of hearing.
(a) An appeal from the Insurance Commissioner shall be taken only from an order on hearing or with respect to a matter as to which the commissioner has refused or failed to grant or hold a hearing after demand therefor under § 23-61-303 or as to a matter as to which the commissioner has refused or failed to make his or her order on hearing as required by § 23-61-306.
(b) Any person who was a party to the hearing, or whose pecuniary interests are directly and immediately affected by the refusal or failure to grant a hearing, and who is aggrieved by the order, refusal, or failure may appeal from the order on hearing or as to any such matter within thirty (30) days after:
(1) The order on hearing has been mailed or delivered to the persons entitled to receive it;
(2) The commissioner's order denying rehearing or reargument has been so mailed or delivered;
(3) The commissioner has refused or failed to make his or her order on hearing as required under § 23-61-306; or
(4) The commissioner has refused or failed to grant or hold a hearing as required under § 23-61-303.
(c) The appeal shall be granted as a matter of right and shall be taken to the Circuit Court of Pulaski County by filing written notice of appeal in the court and by filing a copy of the notice with the commissioner, except that, in appeals from the refusal, suspension, or revocation of the license of an agent, broker, solicitor, or surplus line broker, the person taking the appeal may at his or her option take the appeal to the circuit court of the county in which the person resides instead of to the Circuit Court of Pulaski County.
(d) Upon filing of the notice of appeal therein, the court shall have full jurisdiction and shall determine whether the filing shall operate as a stay of the order or action appealed from and shall have the right at any time thereafter to issue such other temporary or preliminary orders as to it may seem proper until a final decree is rendered.
(e) Within thirty (30) days after filing of the copy of notice of appeal in his or her office, or within such further time as the court may allow, the commissioner shall make, certify, and deposit in the office of the clerk of the court in which the appeal is pending a full and complete transcript of all proceedings had before the commissioner and all evidence before him or her in the matter, including all his or her files therein.
(f) Upon receipt of the transcript, evidence, and files, the court, as soon as reasonably possible thereafter, shall review the action of the commissioner appealed from.
(g)(1) Any appeal shall be upon the basis of the record so presented.
(2) In any review the findings of the commissioner as to the facts, if supported by substantial evidence, shall be conclusive.
(3) If any party shall apply to the court for leave to adduce additional evidence and shall show to the satisfaction of the court that the additional evidence is material and that there were reasonable grounds for the failure to adduce the evidence in the proceedings before the commissioner, the court may order the additional evidence to be taken before the commissioner and to be adduced upon the hearing in such manner and upon such terms and conditions as the court may deem proper.
(4) The commissioner may modify his or her findings of fact or make new findings by reason of the additional evidence taken pursuant to subdivision (g)(3) of this section. The commissioner shall file the modified or new findings, which, if supported by substantial evidence, shall be conclusive, and his or her recommendation, if any, for the modification or setting aside of his or her original order with the return of the additional evidence.
(h) After hearing the appeal the court may affirm, modify, or reverse the order or action of the commissioner in whole or in part, or may remand the action to the commissioner for further proceedings in accordance with the court's direction.
(i) Costs shall be awarded as in civil actions.
(j)(1) Appeal may be taken to the Arkansas Supreme Court or the Arkansas Court of Appeals from the judgment of the circuit court as in other civil cases.
(2) The circuit court judgment appealed from shall not be subject to supersedeas, and a stay of the effectiveness of any judgment may be made only by order of the Arkansas Supreme Court or the Arkansas Court of Appeals upon the giving of such security as the court deems proper.
The Insurance Commissioner shall collect annually or biennially as prescribed by rule of the commissioner and pay to the Treasurer of State the following fees, licenses, and miscellaneous charges:
(1) Admission fees:
(A) Filing and reviewing all documents necessary for
issuance of certificate of incorporation for domestic
companies ............................................................................................................. $100.00
(B) Issuance of an original certificate of incorporation for
domestic companies .................................................................................................. 50.00
(C) Reviewing all documents necessary for issuance of
original certificate of authority ............................................................................... 500.00
(D) Issuance of original certificate of authority for all
companies ................................................................................................................ 150.00
(E) Issuance of original license for rate service organizations
and employer service assurance organizations......................................................... 500.00
(F) Filing and reviewing all documents of a nonadmitted
company seeking to be placed on the “approved” list for
the writing of surplus lines insurance ....................................................................... 500.00
(2) Annual renewal fees:
(A) Filing an annual statement for all companies ............................... 50.00
(B) Renewal of a certificate of authority for all
companies .................................................................................................................. 100.00
(C) Rate service organizations and employer service assurance
organizations, annual continuation of license ............................................................ 100.00
(3) Other miscellaneous fees:
(A) Amendment to articles of incorporation ....................................... 25.00
(B) Reinstatement of certificate of authority ....................................... 50.00
(C) Amending an existing certificate of authority.............................. 100.00
(4) Agent’s license for resident agents:
(A) Property, casualty, surety agents:
Original issuance of each license ................................................................................. 15.00
Annual continuation of appointment, each insurer ...................................................... 10.00
Appointment of agent by insurer, each insurer ............................................................ 10.00
(B) Life and accident and health insurance agents:
Appointment of agent by insurer, each insurer.............................................................. 10.00
Annual continuation of appointment, each insurer ....................................................... 10.00
(C) Each vending machine licensed under § 23-64-221,
each year ........................................................................................................................ 10.00
(5) Broker’s license for resident brokers:
(A) Original license ............................................................................... 30.00
(B) Annual continuation of license ....................................................... 30.00
(6) Nonresident broker (corporate) license:
(A) Original license ............................................................................... 30.00
(B) Annual continuation of license ....................................................... .30.00
(7) Nonresident broker license:
(A) Original license .............................. .................................................30.00
(B) Annual continuation of license ........................................................ 30.00
(8) Nonresident agent license fees: ....................As established by rule of the commissioner
(9) Temporary license:
(A) As resident agent ............................................................................. 10.00
(B) As resident broker ........................................................................... 25.00
(10) Examination for agent or broker license:
(A) Filing application for examination for agent or broker ................... 10.00
(B) Filing application for reexamination for agent or
broker ............................................................................................................................... 5.00
(11) Surplus line broker license:
(A) Original license, individual ......................................................... 1,000.00
(B) Original license, firms and corporations plus one (1)
qualifying individual .................................................................................................. 1,000.00
(C) Each additional individual............................................................... 100.00
(D) Annual continuation of license ......................................................... 25.00
(12) Adjuster’s license, each year ................................................................................... 25.00
(13) Consultants:
(A) Original license ................................................................................. 25.00
(B) Annual renewal ................................................................................. 25.00
(14) Miscellaneous services:
(A) For copies of documents and records on file in State
Insurance Department, per page ........................................................................................ 0.25
(B) For each certificate of the commissioner other than
certificates of authority ..................................................................................................... 5.00
(a) The Insurance Commissioner shall deposit all fees collected under § 23-61-401 into the State Treasury as special revenues. Unless specifically authorized by law, order, or consent decree for collection and deposit into other accounts or other trust funds as general or special revenues, including, but not limited to, the State Insurance Department Trust Fund under the State Insurance Department Trust Fund Act, § 23-61-701 et seq., the Insurance Continuing Education Trust Fund under § 23-64-307, and the State Insurance Department Criminal Investigation Division Trust Fund under § 23-100-103, all fees, penalties and fines, gifts, grants and endowments and awards, restitution payments, interest and investment income, and dividends paid or payable to or collected by the commissioner, or both, and not otherwise appropriated shall be deposited into the State Insurance Department Trust Fund as special revenues for the maintenance, operation, and support of and improvements to the State Insurance Department.
(b) On the last business day of each month, the State Treasury shall credit the net amount of the fees collected under § 23-61-401 to the Constitutional Officers Fund and the State Central Services Fund to be used for the maintenance, operation, and improvement of the respective agencies and services receiving support from the Constitutional Officers Fund and the State Central Services Fund as authorized by law.
The purpose of this subchapter is to:
(1) Enable the State of
(2) Allow examinations by this state unless the provider of health care benefits is able to show it is not subject to the jurisdiction of the State Insurance Department; and
(3) Make the provider of health care benefits subject to the applicable laws of this state unless it can show that it is not subject to the jurisdiction of the department.
The provisions of this subchapter shall not apply to those health care plans which are maintained:
(1) Pursuant to a collective bargaining agreement;
(2) By a tax exempt rural electric cooperative;
(3) By the
(4) By any nonprofit vision service plan corporation composed of at least fifty (50) participating optometrists or ophthalmologists licensed by the State of Arkansas to provide vision care services on a prepaid basis when each licensed optometrist or ophthalmologist is subject to the rules and regulations of the professional's respective state board and when each participating licensed optometrist or ophthalmologist agrees to assume responsibility for completion of the provisions of the vision care services contracted for so that no element of risk is incurred by any subscriber group or person.
(a) Notwithstanding any other provision of law and except as provided in this subchapter, any person, entity, or plan that provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether the coverage is by direct payment, reimbursement, or otherwise, shall be presumed to be subject to the jurisdiction of the State Insurance Department and to all other applicable provisions of the Arkansas Insurance Code unless the person, entity, or plan described in this section shows that it is not subject to the jurisdiction of the department.
(b) This subchapter shall not apply to:
(1) A trust established under §§ 14-54-101 and 25-20-104 to provide benefits such as accident and health benefits, death benefits, dental benefits, and disability income benefits; or
(2) The Comprehensive Health Insurance Pool Act, § 23-79-501 et seq.
Any person, entity, or other provider described in § 23-61-503 that fails to show it is not subject to the jurisdiction of the State Insurance Department shall submit to an examination or investigation by the Insurance Commissioner to determine its organization, solvency, and compliance with the Arkansas Insurance Code.
The Insurance Commissioner is authorized to promulgate rules and regulations which may be necessary for the implementation and enforcement of this subchapter.
This subchapter may be cited as the “Risk Management Act”.
(a) It is the purpose of this subchapter to reduce the cost to the state of insurance coverage, including surety bonds, by establishing the Risk Management Division.
(b) It is also the purpose of this subchapter that the division analyze and make recommendations as to cost-effective loss control and safety programs for the various state agencies.
(c) It is also the purpose of this subchapter to authorize the division to advise and give assistance to municipalities, counties, school districts, and improvement districts as to the procurement of insurance coverage and other risk management techniques.
As used in this subchapter, unless the context otherwise requires:
(1) “Risk management” means the minimization of loss through the discovery of loss sources, evaluation of the impact of a possible loss on the organization, and the selection of the most effective and efficient technique of dealing with risk of loss;
(2) “Risk manager” means the Administrator of the Risk Management Division; and
(3) “State agencies” means any agencies, boards, bureaus, commissions, councils, departments, institutions, or other establishments of this state.
There is created a Risk Management Division within the State Insurance Department.
(a)(1) The Administrator of the Risk Management Division will be appointed by the Insurance Commissioner.
(2) The risk manager shall be knowledgeable and experienced in risk management techniques.
(b) The risk manager shall have the authority to:
(1) Establish standardized specifications for insurance coverage of all state agencies;
(2) Determine all specifications for insurance coverage of state agencies;
(3) Assist and advise state agencies in the procurement of insurance coverage;
(4) Establish a system for reporting insured or uninsured losses incurred by state agencies and purchases of insurance by state agencies within guidelines established by the risk manager;
(5) Develop and promote programs to control losses and encourage safety; and
(6) Perform any other function of risk management as directed by the commissioner.
(a) The State Procurement Director shall procure insurance or surety bonding in accordance with the Arkansas Procurement Law, § 19-11-201 et seq., unless the risk manager determines that it is in the best interest of the state for the director to procure insurance or surety bonding by negotiation, or for any state agency to procure all or part of its own insurance or surety bonding.
(b) When the Administrator of the Risk Management Division authorizes state agencies to procure insurance or surety bonding, the authorization shall be made in writing and approved by the Insurance Commissioner. The authorization may be made for, but not limited to, purchases not exceeding an amount established by regulations, particular lines of insurance, and purchases by state agencies with a demonstrated expertise in the field of risk management.
(c) Upon approval of the risk manager and the director, a state agency may be authorized to procure insurance or surety bonding under emergency conditions. Emergency conditions exist when life, health, welfare, assets, or functional operations of an agency are or may be threatened or impaired.
(d) The director shall not have jurisdiction over the procurement of surety bonding or insurance coverage for state agencies except as provided by this subchapter.
(a) The Administrator of the Risk Management Division shall have the authority to promulgate rules and regulations consistent with this subchapter.
(b) All rules and regulations shall be subject to the approval of the Insurance Commissioner and conform with the requirements of the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
(a) At the request of any municipality, county, school district, or improvement district, the risk manager may give advice and assistance on the purchase of insurance coverage and other risk management techniques.
(b) However, counties, municipalities, school districts, and improvement districts may be required to reimburse the State Insurance Department for expenses incurred by providing the assistance. Reimbursements shall not include salary and benefit expenses for full-time state employees.
(c) The reimbursements shall be deposited in the State Treasury as nonrevenue receipts refund to expenditures.
(d) This section shall only be used in the event that budgetary constraint dictates this action to prevent undue fiscal hardships on the department.
State agencies shall report to the Administrator of the Risk Management Division information that the risk manager determines to be necessary to analyze and manage the risk of loss of state assets.
The Administrator of the Risk Management Division shall report annually to the Governor and the Legislative Council on his or her findings and recommendations.
This subchapter shall be known as the “State Insurance Department Trust Fund Act”.
(a) There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the State Insurance Department Trust Fund to be used to:
(1) Defray the expenses of the State Insurance Department in the discharge of its administrative and regulatory powers and duties as prescribed by law;
(2) Defray the administrative expenses and losses incurred by the Arkansas Comprehensive Health Insurance Pool or its successor; and
(3) Fund capital expenditures and training for fire departments certified by the Arkansas Department of Emergency Management.
(b) No money is to be appropriated from this fund for any purpose except:
(1) As provided in subsection (a) of this section;
(2) For the personal services and operating expenses, maintenance and operations, and support of and improvements to the State Insurance Department; or
(3) At the direction of the Insurance Commissioner for the use, benefit, and support of the State Insurance Department.
(c) The fund established pursuant to this section shall be administered, disbursed, and invested under the direction of the commissioner and the Treasurer of State.
(d) All income derived through grants, refunds, and gifts to the fund shall be credited as income to the fund and deposited therein.
(e) Further, all moneys deposited to the fund shall not be subject to any deduction, tax, levy, or any other type of assessment except as may be provided in this subchapter.
(a) [Effective until January 1, 2010.] Notwithstanding the provisions of § 26-57-602 and other provisions of Arkansas law, all licensed insurers, including, but not limited to, all licensed stock and mutual insurance companies, health maintenance organizations, fraternal benefit societies, hospital and medical service corporations, stipulated premium insurers, reinsurers, and farmers' mutual aid associations shall annually on or before June 30 at the time and in the manner as the Insurance Commissioner shall prescribe or at times alternate from June 30 annually as the commissioner shall prescribe, pay to the State Insurance Department Trust Fund a nonrefundable administrative and financial regulation fee.
(a) [Effective January 1, 2010.] Notwithstanding § 26-57-602 and other provisions of Arkansas law, all licensed insurers, including without limitation all licensed stock and mutual insurance companies, health maintenance organizations, fraternal benefit societies, hospital and medical service corporations, stipulated premium insurers, reinsurers, and farmers’ mutual aid associations annually in the manner prescribed by the Insurance Commissioner shall pay to the State Insurance Department Trust Fund a nonrefundable administrative and financial regulation fee no later than:
(1) June 1; or
(2) A date or dates established by rule of the commissioner.
(b)(1) This fee shall be based
upon the insurer's direct premiums and copayments written in the State of
(2) Insurers and reinsurers with no annual direct
written
(c) Such administrative and financial regulation fees shall be paid in the following amounts based upon the following schedule:
|
PREMIUMS AND
COPAY-
MENTS OF INSURERS, HMO’S, FMAA’S, AND OTHERS (total for preceding calendar year) $0 $ 500 01-499,999 750 500,000-2,499,999 1,000 2,500,000-4,999,999 2,500 5,000,000-7,499,999 5,000 7,500,000-9,999,999 7,500 10,000,000-19,999,999 10,000 20,000,000-29,999,999 12,000 30,000,000-49,999,999 15,000 50,000,000-74,999,999 17,500 75,000,000-99,999,999 20,000 100,000,000 AND UP 25,000
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(d) In no event shall the annual financial regulation fee imposed in this section and assessed to support the maintenance and operation of the department exceed twenty-five thousand dollars ($25,000) for any one (1) insurer or reinsurer in any one (1) year.
(a)(1) The Insurance Commissioner may grant any licensed insurer an extension for reporting and payment of the annual administrative and financial regulation fee for good cause shown upon the written application of the licensed insurer received at the State Insurance Department on or before each annual due date.
(2) Absent the commissioner's approval of such time extensions for good cause, licensed insurers failing timely to report or pay the administrative and financial regulation fee shall be subject to a penalty of one hundred dollars ($100) a day for each day of delinquency, payable to the State Insurance Department Trust Fund.
(3)(A) The commissioner may pursue any appropriate legal remedies on behalf of the State Insurance Department Trust Fund to collect the administrative and financial regulation fees and penalties due and unpaid from any delinquent insurer.
(B) Further, the commissioner may in his or her
discretion order suspension of the delinquent insurer's
(4) Absent a grant of his or her waiver for good
cause shown, the commissioner may revoke the
(b)(1) The commissioner may in his or her discretion waive all or any part of the administrative and financial regulation fee due annually from a licensed insurer upon the suspension or revocation of the insurer's Arkansas certificate of authority, or upon issuance of a court order placing the company into conservation, rehabilitation, or liquidation in any state, or upon the commissioner's finding that the insurer is impaired or insolvent, or that its operations are hazardous to the insurance-buying public of this state.
(2) Upon the reinstatement or activation of the
insurer's
The Insurance Commissioner shall deposit all administrative and financial regulation fees and any penalties assessed under this subchapter directly into the State Insurance Department Trust Fund as special revenues.
(a) In addition to and notwithstanding all other current and future statutory fees, assessments, or penalties paid by licensees or registrants in connection with the issuance and renewal of their Arkansas licenses or registrations as required under the Arkansas Insurance Code or other Arkansas laws, new and additional or increased nonrefundable administrative and regulatory fees are hereby imposed against all licensed resident and nonresident agents, agencies, brokers, surplus line and purchasing group brokers, risk retention agents, third party administrators, and similar licensees or registrants for each and every individual, firm, or corporation licensed or registered by the State Insurance Department pursuant to the provisions of the Arkansas Insurance Code and, in particular, the provisions of § 23-64-101 et seq., § 23-64-201 et seq., § 23-65-301 et seq., § 23-73-101 et seq., § 23-74-101 et seq., § 23-76-101 et seq., § 23-91-201 et seq., § 23-92-201 et seq., and § 23-94-201 et seq., excluding insurers, health maintenance organizations, hospital and medical service corporations, fraternal benefit societies, and farmers' mutual aid associations, risk retention and purchasing groups, stipulated premium insurers, and similar insurer-type entities.
(b) The fees shall be payable to the State Insurance Department Trust Fund for the support and operation of the State Insurance Department, and in no event shall any one (1) fee required by subsection (a) of this section exceed a maximum of fifty dollars ($50.00) per license or registration. The fees due per license as required by this section commencing on and after July 1, 1994, and annually thereafter, shall be due in an amount and at such times or upon such schedule as the Insurance Commissioner shall prescribe in a companion rule and regulation to this chapter after notice and a public hearing, so long as the companion rule does not provide for any one (1) fee set pursuant to this section to exceed the maximum amount of fifty dollars ($50.00) per license.
(c) Commencing immediately on and after March 24, 1993, all new applicants for original or initial licensure or registration pursuant to the provisions of any of the Arkansas Insurance Code subchapters recited in subsection (a) of this section shall pay the annual administrative and regulatory fee per license or registration to accompany the application for such license or registration upon filing with the department.
(d)(1) Upon the failure of the applicant or licensee or registrant timely to report or pay any of the additional administrative and regulatory fees assessed in this section, the fee payable to the State Insurance Department Trust Fund shall be twice the amount required in this section.
(2) Additionally, without an abuse of discretion, the commissioner in his or her discretion may deny licensure or renewal licensure or registration or renewal registration to a new applicant, licensee, or registrant, or may suspend or revoke current licensees or registrants required by this section to pay the administrative and regulatory fee.
(3) The commissioner may also pursue other civil legal remedies for collection of the fees and penalties due and unpaid from applicants and licensees and registrants pursuant to this section.
(e) Upon collection, the Insurance Commissioner shall deposit all such administrative and regulatory fees and penalties directly into the State Insurance Department Trust Fund as special revenues.
(f) For the licensees enumerated in this section whose licenses are subsequently suspended for violations of Arkansas laws or the commissioner's rules or orders, the administrative and regulatory fees are due and owing upon the normal due date prescribed in the commissioner's companion rule to this subchapter, including those licensees under a license suspension ordered by the commissioner for timely failure to pay this regulatory fee, and license reinstatement shall not proceed, automatically or otherwise, pursuant to the Arkansas Insurance Code unless and until the licensee pays all outstanding and owing regulatory fees imposed by this chapter.
(a) Effective on and after July 1, 1999, the Insurance Commissioner shall collect in advance the following fees and miscellaneous charges:
(1) Facsimile copies, per page . . . . . $0.50
(2) Hard copy printout of one microfiche page . . . . . 1.00
(3) Electronic copies, per page . . . . . 0.25
(b) The commissioner shall deposit all such fees required by this section directly into the State Insurance Department Trust Fund as special revenues.
(a)(1) Notwithstanding other provisions of this subchapter and notwithstanding other provisions of the Arkansas Insurance Code or other applicable Arkansas laws, the Insurance Commissioner shall by companion rule to this subchapter prescribe the amount and manner of payment of new, additional, or increased but nonrefundable fees due as special revenues to the State Insurance Department Trust Fund for the following services, documents, or publications provided by the State Insurance Department, including, but not limited to:
(A) Filing by insurers of each agent appointment termination form;
(B) Application for or issuance of original certification to be a course provider for agent prelicensing or continuing education in this state;
(C) Application for or issuance of renewal certification to be a course provider for agent prelicensing or continuing education in this state;
(D) Filing fees for applications filed for original examinations and retake examinations administered by the department;
(E) Filing of initial and renewal insurer appointments of resident insurance agencies, corporations, or firms and partnerships;
(F) Annual renewal of each certificate of registration issued to a third party administrator;
(G) A filing and processing fee for filing legal process with the department wherein the commissioner is serving as official agent for service of process;
(H) Filing and processing fees for filing specimen insurance policy and contract forms of all types with the department;
(I) A filing fee for obtaining department lists of various kinds of licensees or registrants; and
(J) Similar department services and products.
(2) In the event the commissioner is required by laws enacted contemporaneous with or subsequent to this subchapter to perform other duties or incur other obligations, and in the event current revenues of the department, including, but not limited to, those revenues produced by this subchapter, are not sufficient for the commissioner to perform those new or additional duties efficiently and promptly or to the extent the commissioner deems necessary, then the commissioner shall enact new or additional or increased fees for departmental services, documents, and publications, but such fees shall only be adopted and imposed in a rule and regulation promulgated by the commissioner after notice and a hearing pursuant to the Arkansas Administrative Procedure Act, § 25-15-201 et seq., and other applicable sections of the Arkansas Insurance Code and other laws.
(3) The fees described in this section and prescribed in amount and frequency of payment in the commissioner's companion rule to this subchapter shall be payable to the State Insurance Department Trust Fund as special revenues for the support and operation of the State Insurance Department.
(b)(1)(A) The fees for various department services, documents, or publications shall be divided into two (2) categories, Category A fees and Category B fees, and shall be so specified in the companion rule to this subchapter.
(B) Category A fees at a maximum of fifteen hundred dollars ($1,500) per transaction shall consist of those fees representing material or substantive corporate transactions of licensees, including, but not limited to, holding company changes in control of insurers or similar entities, corporate mergers and consolidation, bulk, or assumptive reinsurance transactions, as well as department products and services which would require a substantial commitment of department resources per transaction.
(C) Category B fees at a maximum of fifty dollars ($50.00) per transaction shall consist of those fees representing other transactions of licensees, as well as department products and services which would not require a substantial commitment of department resources per transaction.
(2) In no event shall any one (1) Category A fee or Category B fee for any department service, document, or publication per transaction pursuant to this section and the commissioner's companion rule and regulation exceed the maximums listed herein.
(c) The commissioner may from time to time alter the fee amounts by rule and regulation amendment pursuant to the Arkansas Administrative Procedure Act, § 25-15-201 et seq., but in no event shall such fee amendments necessary for continued support and operation of the department exceed the limitations set forth in this section.
(d) Insurers obligated to secure or renew agent appointments using department forms one through forty-eight (1-48) for their agent representatives on the licensing records of the State Insurance Department pursuant to the provisions of § 23-64-514 on a new or biennial renewal basis shall no longer collect such licensure expenses, directly or indirectly, from the agent licensee, or exact any form of reimbursement for the statutory appointment fees, or pass such costs along to the agent licensee, directly or indirectly, as any other type of charge, notwithstanding the provision of any agency, brokerage, or employment contract or agreement with such agent to the contrary.
(a) The Insurance Commissioner shall be duly authorized to promulgate rules and regulations necessary to effectuate the purposes of this subchapter.
(b) Upon his or her determination and finding that State Insurance Department appropriations or funding is insufficient to operate the department efficiently or to allow the commissioner to perform all of his or her statutorily mandated duties and tasks, the commissioner may, in his or her discretion, by rule and regulation following notice and a public hearing, increase the amounts of the fees, license fees, fines, penalties, and revenues as provided in this subchapter for deposit into the State Insurance Department Trust Fund as special revenues.
(c)(1) Further, in his or her discretion the commissioner may establish and collect as special revenues additional or increased fees and penalties not otherwise specified in this subchapter, for direct deposit into the State Insurance Department Trust Fund as special revenues if the fees and revenues provided by this subchapter are insufficient, in connection with all other revenues appropriated to and funded for the department, to defray all the expenses of the department in the efficient discharge of its administrative and regulatory powers and duties as prescribed by law.
(2) Any special revenues and fees established by the commissioner by the authority of this section shall be classified in and meet the criteria of the Category A fees or Category B fees specified by § 23-61-708.
(3) Upon collection by the commissioner, these funds shall be deposited as special revenues directly into the State Insurance Department Trust Fund.
(4) The commissioner may from time to time alter the amounts of the fees specified in the companion rules to this subchapter by amending the rules pursuant to the procedures of the Arkansas Administrative Procedure Act, § 25-15-201 et seq., as necessary to the continued support and operation of the department.
(a) All fees, license fees, and additional or increased license or registration fees, fines, penalties, and revenues provided for in this subchapter received as special revenues for the State Insurance Department Trust Fund and deposited therein shall be deemed for all purposes revenues of the State Insurance Department Trust Fund and of the State Insurance Department for the sole support, operation, and maintenance of the department, and, when paid into the State Treasury by the Insurance Commissioner, shall be maintained by the State Treasury as the State Insurance Department Trust Fund, separate from all other funds, and available only for the payment of the expenses of the department pursuant to the appropriations therefor.
(b) The Auditor of State shall, upon proper voucher from the commissioner, issue his or her warrant on the Treasurer of State in payment of all salaries and other expenses incurred in the administration of this subchapter.
(c) The commissioner shall at the end of each biennium period cause to be transferred into the General Revenue Fund Account of the State Apportionment Fund the excess of the State Insurance Department Trust Fund moneys over an amount equal to three (3) fiscal-year budgets for the department.
The fees assessed or imposed by this subchapter upon insurers, as defined or referenced in § 23-61-703, and the fees assessed or imposed in § 17-19-301 and §§ 23-61-706 — 23-61-709 upon professional bail bond companies, insurers, insurance agents, brokers, and other licensees or registrants are imposed in addition to all other fees, assessments, premium and privilege taxes, penalties, and other such payments such licensees or registrants pay the State of Arkansas through the State Insurance Department or other state or governmental agencies pursuant to applicable Arkansas laws, except that insurers' payments of these administrative and financial regulation fees in § 23-61-703 are expressly and in pertinent part to be paid in lieu of payment of department examiners' salaries, wages, and compensation due at or after each examination conducted on the insurer by the department's examiners pursuant to the provisions of § 23-61-201 et seq., and, in particular, § 23-61-206. Therefore, insurers shall still be liable for payment of and shall pay department examiners' expenses for food, lodging, and travel as directed under § 23-61-201 et seq.