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4-114-104. Requirements for doing business.
Arkansas Code — all titles (historical 2020) · legal_authorities
4-114-104. Requirements for doing business.
(a) A provider may appoint an administrator or other designee to be responsible for all or part of the administration of service contracts and compliance with this chapter.
(b) Service contracts shall not be issued, sold, or offered for sale in this state unless the provider or its designee has:
(1) Provided a receipt or other written evidence of the purchase of the service contract to the contract holder;
(2) Provided a copy of the service contract to the service contract holder within a reasonable period of time from the date of purchase; and
(3) Complied with this chapter.
(c)(1) Each provider of service contracts sold in this state shall file a registration with the Insurance Commissioner consisting of its name, full corporate address, telephone number and contact person, evidence of compliance with subsection (d) of this section, a designation of a person in this state for service of process, and any other information required to be submitted by rule of the Insurance Commissioner.
(2) Each provider shall pay to the commissioner a fee in the amount of two hundred dollars ($200) upon initial registration and every year thereafter.
(3) The registration shall be updated by written notification to the commissioner if material changes occur in the registration.
(d) In order to assure the faithful performance of a provider's obligations to its contract holders, each provider that is contractually obligated to provide service under a service contract shall:
(1) Insure all service contracts under a reimbursement insurance policy issued by an insurer licensed, registered, or authorized to transact insurance in this state or a surplus lines insurer that is authorized under § 23-65-310 and maintains statutory capi
Source: Arkansas Code — historical release 78 (November 6, 2020) · 4-114-104
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:4-114-104
Source file: gov.ar.code.title.04.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 226c4c5e5fc9629deb864fe40c520fcb0ba9a4b1072e1a1af93653512ffa8460
Source location: content.xml paragraph 38674
Stored source content
4-114-104. Requirements for doing business.
(a) A provider may appoint an administrator or other designee to be responsible for all or part of the administration of service contracts and compliance with this chapter.
(b) Service contracts shall not be issued, sold, or offered for sale in this state unless the provider or its designee has:
(1) Provided a receipt or other written evidence of the purchase of the service contract to the contract holder;
(2) Provided a copy of the service contract to the service contract holder within a reasonable period of time from the date of purchase; and
(3) Complied with this chapter.
(c)(1) Each provider of service contracts sold in this state shall file a registration with the Insurance Commissioner consisting of its name, full corporate address, telephone number and contact person, evidence of compliance with subsection (d) of this section, a designation of a person in this state for service of process, and any other information required to be submitted by rule of the Insurance Commissioner.
(2) Each provider shall pay to the commissioner a fee in the amount of two hundred dollars ($200) upon initial registration and every year thereafter.
(3) The registration shall be updated by written notification to the commissioner if material changes occur in the registration.
(d) In order to assure the faithful performance of a provider's obligations to its contract holders, each provider that is contractually obligated to provide service under a service contract shall:
(1) Insure all service contracts under a reimbursement insurance policy issued by an insurer licensed, registered, or authorized to transact insurance in this state or a surplus lines insurer that is authorized under § 23-65-310 and maintains statutory capital and surplus of at least fifteen million dollars ($15,000,000) at all times while the reimbursement insurance policy is in force;
(2) Do both of the following:
(A)(i) Maintain a funded reserve account for its obligations under its contracts issued and outstanding in this state.
(ii) The reserves shall not be less than forty percent (40%) of gross consideration received less claims paid on the sale of all unexpired service contracts.
(iii) The reserve account shall be subject to examination and review by the commissioner; and
(B) Place in trust with the commissioner a financial security deposit having a value of not less than five percent (5%) of the gross consideration received less claims paid on the sale of all unexpired service contracts, but not less than twenty-five thousand dollars ($25,000), consisting of a surety bond issued by an authorized surety; or
(3)(A) Maintain a net worth of one hundred million dollars ($100,000,000) on its own or together with its parent company if the parent company executes a parental guarantee in a form acceptable to the commissioner.
(B) Upon request, the provider shall provide the commissioner with a copy of the provider's financial statements or, if the provider's financial statements are consolidated with those of its parent company, the provider's parent company's most recent Form 10-K or Form 20-F filed with the United States Securities and Exchange Commission within the last calendar year, or if the company does not file with the United States Securities and Exchange Commission, a copy of the company's audited financial statements, which shows an independent net worth of the provider or its parent company of at least one hundred million dollars ($100,000,000).
(C) If the provider's parent company's Form 10-K, Form 20-F, or audited financial statements are filed to meet the provider's financial stability requirement, then the parent company shall agree to guarantee the obligations of the obligor relating to service contracts sold by the provider in this state.
(e) Except for the requirements specified in subsection (d) of this section, no other financial security requirements shall be required by the commissioner for a provider.
(f)(1) Provider fees collected on service contracts shall not be subject to premium taxes.
(2) Premiums for reimbursement insurance policies shall be subject to applicable taxes.
(g) Except for the registration requirements in subsection (c) of this section, persons marketing, selling, or offering to sell service contracts for providers that comply with this chapter are exempt from this state's licensing requirements.
(h) Providers complying with this chapter are not required to comply with other provisions of the Arkansas Insurance Code.
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Arkansas Code — all titles (historical 2020) · legal_authorities
23-65-310. Surplus lines in solvent insurers.
(a) A surplus lines broker shall place surplus lines insurance only with insurers that have been approved by the Insurance Commissioner.
(b)(1) The commissioner may maintain a list of approved foreign and alien surplus lines insurers in addition to those alien insurers maintaining status on the current National Association of Insurance Commissioners' nonadmitted insurers' quarterly listing.
(2) The approved list shall not contain:
(A) An insurer that is not licensed in at least one (1) state of the United States for the kind of insurance involved;
(B) A stock insurer having capital and surplus amounting to less than three million dollars ($3,000,000);
(C) A type of insurer, other than stock insurers, having surplus of less than three million dollars ($3,000,000);
(D)(i) An alien insurer, unless:
(a) The insurer has an established and effective trust fund within the United States administered by a recognized financial institution and held for the benefit of its policyholders; and
(b) The trust fund is in the amount of not less than one million dollars ($1,000,000).
(ii)(a) The broker may place casualty insurance with an alien insurer or a pool of alien insurers having combined capital and surplus of five million dollars ($5,000,000) or more, so long as the insured signs an affidavit accepting the insurance.
(b) The affidavit shall include a statement that the insurance is not available to him or her elsewhere.
(iii) The alien insurer shall:
(a) Annually report the location and balance of the trust fund to the commissioner as the commissioner prescribes; and
(b) Report to the commissioner any change in the location of the trust fund;
(E) An insurer owned or controlled by a political sovereign or a
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-65-310
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 23-65-310. This identifies an authority to review, not proof of applicability.