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23-63-1605. Surplus requirements.
Arkansas Code — all titles (historical 2020) · legal_authorities
23-63-1605. Surplus requirements.
(a)(1) The Insurance Commissioner shall not issue a license to a captive insurance company unless the company possesses and maintains unimpaired surplus of:
(A) In the case of a producer reinsurance captive insurance company, not less than three hundred thousand dollars ($300,000);
(B) In the case of a pure captive insurance company, not less than one hundred fifty thousand dollars ($150,000);
(C) In the case of an association captive insurance company incorporated as a stock insurer, not less than three hundred fifty thousand dollars ($350,000);
(D) In the case of an industrial insured captive insurance company incorporated as a stock insurer, not less than three hundred thousand dollars ($300,000);
(E) In the case of an association captive insurance company incorporated as a mutual insurer, not less than seven hundred fifty thousand dollars ($750,000);
(F) In the case of an industrial insured captive insurance company incorporated as a mutual insurer, not less than five hundred thousand dollars ($500,000);
(G) In the case of a sponsored captive insurance company, not less than two hundred fifty thousand dollars ($250,000); and
(H) In the case of a special purpose captive insurance company, an amount determined by the commissioner after giving due consideration to the company's business plan, feasibility study, and pro formas, including the nature of the risks to be insured, but in no event less than three hundred thousand dollars ($300,000).
(2) The surplus may be in the form of:
(A) Cash;
(B) Other assets acceptable to the commissioner; or
(C) An irrevocable letter of credit issued by a bank chartered by this state or a member bank of the Federal Reserve System and approved by the commissioner.
(b) Notwith
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-63-1605
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:23-63-1605
Source file: gov.ar.code.title.23.odt
Pages: Not recorded – Not recorded
Passage SHA-256: ba7d3b46b55fc39277e68219ab563905584182cb7d77998b9cf79ca063219025
Source location: content.xml paragraph 33950
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23-63-1605. Surplus requirements.
(a)(1) The Insurance Commissioner shall not issue a license to a captive insurance company unless the company possesses and maintains unimpaired surplus of:
(A) In the case of a producer reinsurance captive insurance company, not less than three hundred thousand dollars ($300,000);
(B) In the case of a pure captive insurance company, not less than one hundred fifty thousand dollars ($150,000);
(C) In the case of an association captive insurance company incorporated as a stock insurer, not less than three hundred fifty thousand dollars ($350,000);
(D) In the case of an industrial insured captive insurance company incorporated as a stock insurer, not less than three hundred thousand dollars ($300,000);
(E) In the case of an association captive insurance company incorporated as a mutual insurer, not less than seven hundred fifty thousand dollars ($750,000);
(F) In the case of an industrial insured captive insurance company incorporated as a mutual insurer, not less than five hundred thousand dollars ($500,000);
(G) In the case of a sponsored captive insurance company, not less than two hundred fifty thousand dollars ($250,000); and
(H) In the case of a special purpose captive insurance company, an amount determined by the commissioner after giving due consideration to the company's business plan, feasibility study, and pro formas, including the nature of the risks to be insured, but in no event less than three hundred thousand dollars ($300,000).
(2) The surplus may be in the form of:
(A) Cash;
(B) Other assets acceptable to the commissioner; or
(C) An irrevocable letter of credit issued by a bank chartered by this state or a member bank of the Federal Reserve System and approved by the commissioner.
(b) Notwithstanding the requirements of subsection (a) of this section, a captive insurance company organized as a reciprocal insurer under this subchapter may not be issued a license unless it possesses and maintains a free surplus of one million dollars ($1,000,000).
(c)(1) The commissioner may prescribe additional surplus based upon the type, volume, and nature of insurance business transacted.
(2) This capital may be in the form of:
(A) Cash;
(B) Other assets acceptable to the commissioner; or
(C) An irrevocable letter of credit issued by a bank chartered by this state or a member bank of the Federal Reserve System.
(d)(1) A captive insurance company may not pay a dividend out of, or other distribution with respect to, capital or surplus in excess of the limitations set forth in § 23-63-515, without the prior approval of the commissioner.
(2) Approval of an ongoing plan for the payment of dividends or other distribution must be conditioned upon the retention at the time of each payment of capital or surplus in excess of amounts specified by or determined in accordance with formulas approved by the commissioner.
(3) This subsection (d) shall not apply to a producer reinsurance captive insurance company.
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Arkansas Code — all titles (historical 2020) · legal_authorities
23-63-515. Standards — Definition.
(a)(1) Material transactions by insurers registered with the Insurance Commissioner under § 23-63-514 with their affiliates shall be subject to the following standards:
(A) The terms shall be fair and reasonable;
(B) The books, accounts, and records of every party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transactions, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties;
(C) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs;
(D) The charges or fees for services performed shall be reasonable;
(E) The expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; and
(F) The commissioner by rule may establish additional requirements for a cost-sharing service agreement or a management agreement.
(2)(A) A domestic insurer subject to this subchapter and a person in its holding company system may not enter into a transaction, as described in subdivision (a)(2)(B) of this section, unless the insurer notifies the commissioner in writing of its intention at least thirty (30) days before, or less, as the commissioner may permit, and the commissioner does not disapprove of the transaction within such a period.
(B) A transaction that requires prior notice to the commissioner by a domestic insurer includes:
(i) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments, provided the transactions are equal
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-63-515
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 23-63-515. This identifies an authority to review, not proof of applicability.