23-63-205. Certificate of authority - Eligibility - Capital funds.

(a)(1) On and after January 1, 2002, to qualify for and maintain authority to transact any one (1) kind of insurance, as defined in 23-62-101 - 23-62-108, or combination of kinds of insurance as shown in this subsection, an insurer applying for its original certificate of authority in Arkansas shall possess and maintain in cash and marketable securities unimpaired paid-in capital if the insurer is a domestic, foreign, or alien stock insurer or surplus if the insurer is a domestic, foreign or alien mutual, or domestic mutual legal reserve life insurer, or foreign or alien reciprocal insurer, in an amount not less than is applicable under the schedule below, and shall possess when first so authorized such additional funds as surplus as are required under 23-63-207: 



    Kinds of                                               Minimum Capital or
    Insurance                                               Surplus Required
Life .........................................................   $ 750,000
Accident and Health ..........................................     750,000
Life and Accident and Health .................................     750,000
Property .....................................................     500,000
Casualty .....................................................     750,000
Surety .......................................................     750,000
Marine                                                             500,000
Title ........................................................     250,000
Property, Casualty, Surety, and Marine .......................     750,000
Combination of other lines ...................................     750,000

(2)  As to any combination of kinds of insurance, other than combinations of kinds of insurance specifically listed in this subsection, the insurer shall possess the sum of the minimum capital or surplus required by this subsection for the kinds of insurance it proposes to transact. 

(3)  The Insurance Commissioner may require reinsurance on terms and in amounts as are reasonable under the circumstances for abstractor's professional liability insurance when written by title insurers. 

(4)  In his or her discretion, the commissioner may require the insurer to possess and maintain additional capital, if a stock insurer, and surplus, if a mutual or reciprocal insurer, in addition to that required by this section, based on the financial condition of the insurer or based on the types, volume, or nature of the business transacted by the insurer. 

(b)  An insurer holding a valid certificate of authority to transact insurance in this state immediately prior to January 1, 2002, may continue to be authorized to transact the same kinds of insurance as permitted by the certificate of authority by maintaining thereafter the same amount of paid-in capital stock, if the insurer is a stock insurer, or the amount of surplus, if the insurer is a mutual or reciprocal insurer, as required by the laws of this state for such an insurer immediately prior to January 1, 2002. However, the insurer shall not be granted authority to transact any other or additional kind of insurance, unless it then fully complies with the requirement as to capital and surplus, as applied to the kinds of insurance it then proposes to transact, as provided by this section with respect to insurers applying for original certificates of authority. 

(c)  Capital and surplus requirements shall be based upon all the kinds of insurance actually transacted or currently to be transacted by the insurer in any and all areas in which it operates, whether or not only a portion of the kinds are to be transacted in this state. 

(d)  As to surplus required for qualification to transact one (1) or more kinds of insurance and to be maintained, domestic mutual insurers, other than mutual life insurers, shall be governed by 23-69-101 - 23-69-103, 23-69-105 - 23-69-141, 23-69-143, and 23-69-149 - 23-69-156, and domestic reciprocal insurers shall be governed by 23-70-101 et seq. 

(e)  A life insurer may also grant annuities without additional capital or additional surplus. 

(f)  A casualty insurer may be authorized to transact also accident and health insurance without additional capital or additional surplus. 

History. Acts 1959, No. 148, 49; 1967, No. 172, 1; 1971, No. 539, 1; 1975, No. 729, 1; 1979, No. 942, 7; 1981, No. 451, 1; 1985, No. 744, 1; A.S.A. 1947, 66-2207; Acts 1987, No. 456, 4; Acts 1991, No. 723, 16; 2001, No. 1603, 9; 2001, No. 1604, 17, 18.

  23-63-207. Certificate of authority - Eligibility - Special surplus.

(a)  In addition to the minimum paid-in capital stock if stock insurers, or minimum surplus if mutual and reciprocal insurers, required by 23-63-205, special surplus shall be possessed by insurers hereafter applying for original certificates of authority in this state as follows: 

(1)  All domestic stock insurers and domestic mutual legal reserve life and domestic reciprocal insurers, when first authorized to transact insurance in this state, shall have, if a stock insurer, surplus, or, if a mutual or reciprocal insurer, additional surplus, equal to not less than one hundred percent (100%) of the minimum paid-in capital stock or minimum surplus otherwise required under 23-63-205 for the kinds of insurance to be transacted; 

(2)  Foreign and alien insurers that have actively transacted insurance as authorized insurers in one (1) or more states of the United States shall possess, when first authorized in this state, surplus or additional surplus equal to not less than one hundred percent (100%) of the minimum paid-in capital stock if a stock insurer, or minimum surplus if a mutual or reciprocal insurer, otherwise required under 23-63-205. 

(b)  As to all insurers referred to in subdivisions (a)(1) and (2) of this section, and as to currently authorized insurers seeking additional authority in this state, if, after issuance of its original certificate of authority to transact insurance in this state, the insurer requests authority to transact additional kinds of insurance, the request shall not be authorized unless the insurer then possesses special surplus or additional surplus in such an amount as would be required under this section as for an original certificate of authority covering the kinds of insurance the insurer then proposes to transact. 

(c)  On and after January 1, 1996, as to all domestic stock and domestic mutual and domestic reciprocal insurers currently licensed or obtaining original licensure on and after January 1, 1996, the insurer shall maintain a minimum special surplus of not less than fifteen percent (15%) of the paid-in capital, if a stock insurer, or fifteen percent (15%) of surplus, if a mutual or reciprocal insurer, as reported in its last preceding annual statement. The Insurance Commissioner in his or her discretion may allow domestic insurers to augment special surplus in increments over a period of up to five (5) years to achieve compliance with the minimum amounts required herein, if immediate compliance with this subsection would cause the domestic insurer to be impaired or insolvent. 

(d)  In his or her discretion, the commissioner may require an insurer applying for its original certificate of authority to possess and maintain additional special surplus, in addition to that required by this subchapter, based on the financial condition of the insurer or the types, volume, or nature of the business transacted by the insurer. 

History. Acts 1959, No. 148, 50; 1973, No. 66, 2; 1975, No. 729, 2; 1979, No. 942, 8; A.S.A. 1947, 66-2208; Acts 1993, No. 901, 7; 1995, No. 1272, 10; 2001, No. 1604, 20, 21.