Arkansas Insurance Department Summarizes 2013 Insurance-Related Legislation
Jul 25, 2013
The Arkansas Insurance Department (“Department”) issued a Bulletin on July 22, 2013 summarizing insurance-related legislation enacted following that state’s 2013 Regular Legislative Session, which convened January 14 and adjourned May 17.
The Bulletin, which can be viewed by clicking here, details legislation pertaining to property and casualty as well as life and health insurance, and producers. Issues addressed in the new laws include a decrease in premium tax paid by captive insurance companies, guidelines on early distribution of insurer assets in receivership, clarification of the rate approval process and adoption of the Interstate Insurance Product Regulation Compact. Surplus lines premium tax submission guidelines are also addressed.
Foremost on the Bulletin’s list of new laws, the General Omnibus Act 355–effective August 16–includes the following property and casualty-related provisions, among others:
- Insurance Holding Company Regulation
- Returns § 23-65-503 of the Arkansas Insurance Code to its wording prior to the 2011 Legislative Session, during which the words “directly or indirectly” that modified “control” for purposes of the law were inadvertently stricken and have technical meanings that are important for uniformity under the Insurance Regulatory Holding Company Act.
- Foreign and Alien Surplus Lines Insurers
- Current law requires foreign and alien surplus lines insurers to maintain a deposit of $100,000 in order to be on the Department’s approved list of insurers. In accordance with the federal Non-Admitted and Reinsurance Reform Act of 2010 (NRRA), states are restricted from imposing eligibility requirements on a foreign or alien company to be a non-admitted insurer in a state. This legislation removes the deposit, among other requirements.
- Market Conduct Functions
- Less information will be required to be submitted in market conduct examinations under the new law, but the Arizona Insurance Commissioner may seek additional information if needed after a review of an insurer’s market conduct annual statement
- Payment of Examination Expenses
- Current law states that insurers must pay the Department’s examination expenses. However, § 23-61-203 currently authorizes insurers’ use of outside professionals, with the cost to be paid directly by the examined company to the outside parties. The addition of subsection (a)(2) resolves that conflict.
- Verification of Annual Statement
- Allows an insurance company to have its treasurer sign an Annual Statement when its secretary or actuary is unable or unavailable to do so
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