Chapter 77.
Automobile Clubs Or Associations.

 

23-77-101. Definitions.

As used in this chapter, unless the context otherwise requires: 

(1)  "Automobile club or association" is defined to be: 

(A)  Any person, firm, association, copartnership, corporation, company, or other organization, which undertakes for consideration paid by or on behalf of its members to defray all or a part of the expenses of the members with reference to motor club service as defined in this section or which issued a certificate which provides for the payment of the benefits to the members in services, cash, by furnishing bail, or otherwise; and 

(B)  Every person, firm, association, copartnership, corporation, or company which prior to March 24, 1955, has undertaken for a consideration to pay money or render services to its members, or which has issued any form of contract or certificate or membership card which, under the terms thereof, provides for the payment in money, service, or otherwise for motor club service as defined in this section; 

(2)  "Bail bond service" means any act by an automobile club or association, as defined in this section, the purpose of which is to furnish to, or procure for, any person accused of violation of any law of this state a cash deposit, bond, or other undertaking required by law in order that the accused might enjoy his personal freedom pending trial, subject to, however, the provisions of 27-50-611 and 27-50-612; 

(3)  "Buying and selling service" means any act by an automobile club or association, as defined in this section, whereby the member of any automobile club or association is aided in any way in the purchase or sale of an automobile; 

(4)  "Discount service" means any act by an automobile club or association, as defined in this section, resulting in the giving of special discounts, rebates, or reductions of price on gasoline, oil, repairs, parts, accessories, or service for motor vehicles to members of any automobile club or association; 

(5)  "Emergency road service" means any act by an automobile club or association, as defined in this section, consisting of the adjustment, repair, or replacement of the equipment, tires, or mechanical parts of an automobile so as to permit it to be operated under its own power; 

(6)  "Financial service" means any act by an automobile club or association, as defined in this section, whereby loans or other advances of money, with or without security, are made to members of any automobile club or association; 

(7)  "Insurance service" means any act by an automobile club or association, as defined in this section, consisting of the selling or giving with a membership certificate or as a result of membership in or affiliation with an automobile club or association, as defined in this section, a policy of insurance covering liability or loss by the member of any such automobile club or association as the result of injury to the person of such member following an accident resulting from the ownership, maintenance, operation, or use of a motor vehicle; 

(8)  "Legal service" means any act by an automobile club or association, as defined in this section, consisting of the hiring, retaining, engaging, or appointing of an attorney or other person to give professional advice to, or represent, a member of any automobile club or association, in any court, as the result of liability incurred by the right of action accruing to the member as a result of the ownership, operation, use, or maintenance of a motor vehicle; 

(9)  "Map service" means any act by an automobile club or association, as defined in this section, by which road maps are furnished without cost to members of any automobile club or association; 

(10)  "Motor club service" means the rendering, furnishing, or procuring of four (4) or more of the following services as defined in this section: 

(A)  Towing service; 

(B)  Emergency road service; 

(C)  Insurance service; 

(D)  Bail bond service; 

(E)  Legal service; 

(F)  Discount service; 

(G)  Financial service; 

(H)  Buying and selling service; 

(I)  Theft service; 

(J)  Map service; and 

(K)  Touring service; 

(11)  "Theft service" means any act by an automobile club or association, as defined in this section, the purpose of which is to locate, identify, or recover a motor vehicle, owned or controlled by a member of any automobile club or association, which has been, or may be, stolen, or to detect or apprehend the person guilty of such theft; 

(12)  "Touring service" means any act by an automobile club or association, as defined in this section, by which touring information is furnished without cost to members of any automobile club or association or the making of arrangements, reservations for lodging or travel space, or procurement of tickets or permits for travel to any place in the world for a member of any automobile club or association; and 

(13)  "Towing service" means any act by an automobile club or association, as defined in this section, consisting of the drafting or moving of a motor vehicle from one (1) place to another under other than its own power. 

History. Acts 1955, No. 377, 1, 2; 1981, No. 821, 1; 1985, No. 804, 30; A.S.A. 1947, 75-1601, 75-1602.

23-77-102. Exclusive authority of chapter.

(a)  This chapter shall be deemed and held exclusive authority for the organization and operation of automobile clubs and associations within this state, and the clubs and associations shall not be subject to any other laws respecting insurance companies of any class, kind, or character, except as to the conduct of hearings by the Insurance Commissioner and appeals therefrom. 

(b)  However, this chapter shall not affect the validity of any membership certificate of any automobile club or association issued and outstanding prior to March 24, 1955. 

History. Acts 1955, No. 377, 8; A.S.A. 1947, 75-1608.

23-77-103. Penalty.

(a)  It shall be unlawful for any person, firm, association, copartnership, corporation, company, or other organization to organize, operate, or in any way solicit members for an automobile club or association, or offer any of the motor club services as defined in 23-77-101, except in the manner provided in this chapter and under the rules and regulations promulgated by the Insurance Commissioner. 

(b)  Any person, firm, association, copartnership, corporation, company, or other organization violating the provisions of this section shall be guilty of a misdemeanor and upon conviction shall be fined not more than two hundred fifty dollars ($250) or imprisoned not more than six (6) months, or both fined and imprisoned. 

History. Acts 1955, No. 377, 7; A.S.A. 1947, 75-1607.

23-77-104. Clubs and associations under authority, supervision, and control of Insurance Commissioner.

All automobile clubs and associations organized and operating in the State of Arkansas shall be under the authority, supervision, and control of the Insurance Commissioner. 

History. Acts 1955, No. 377, 4; A.S.A. 1947, 75-1604.

23-77-105. Authority of Insurance Commissioner to grant certificates of authority and conduct hearings.

(a)(1)  The Insurance Commissioner shall have full and complete authority to grant certificates of authorization to automobile clubs and associations, to revoke the certificates, and to prescribe such rules and regulations as are reasonably necessary for the conduct of the business of the clubs and associations within the state and for carrying out the objects and purposes of this chapter. 

(2)  In determining if a certificate of authorization shall be issued, the commissioner shall take into consideration, along with all other factors, the name of the automobile club or association. If the name will interfere with the transactions of an automobile club or association already doing business in this state or is so similar to one already appropriated as to confuse or likely to mislead the public in any respect, the commissioner shall refuse to issue a certificate of authorization. 

(b)  The commissioner shall also have authority to conduct hearings as now provided under the insurance laws of the state. 

History. Acts 1955, No. 377, 3; A.S.A. 1947, 75-1603.

23-77-106. Certificate of authority required - Application and issuance.

(a)  Every club or association desiring to commence operations within the state shall file, prior to the commencement of operations, applications with and receive a certificate of authority from the Insurance Commissioner. 

(b)(1)  No foreign or alien automobile club or association shall be authorized to operate in Arkansas which has not furnished the commissioner with evidence that it has been organized and actively engaged in the automobile club or association business in the state of its incorporation for a period of three (3) years prior to the date of its application to be admitted and authorized to do business in the State of Arkansas. 

(2)  However, this subsection shall not apply to a foreign or alien automobile club or association which is: 

(A)  The wholly owned subsidiary of an automobile club or association or an insurance company admitted and authorized to do business in the State of Arkansas; or 

(B)  The continuing corporation resulting from a merger or consolidation of automobile clubs or associations or insurance companies, at least one (1) of which is in good standing in its state or country of domicile and has been organized and actively engaged in the automobile club or association business in the state or country of domicile for at least three (3) years prior to the date of the application of that corporation to be admitted and authorized to do business in the State of Arkansas. 

(3)  The commissioner may accept evidence of the applicant's good standing and operation for three (3) years under licensure in its state or country of domicile or under licensure in another state or port of entry state, so long as the laws of that jurisdiction regulating automobile clubs or associations are substantially similar to the laws of this state, with forms and certifications as are specified. 

(c)  An automobile club or association must pay to the commissioner one hundred dollars ($100) as an annual license fee. The license fee shall be paid to the commissioner on or before April 1 of each year. 

(d)(1)  The following documents and information shall be filed with the application of all automobile clubs and associations: 

(A)  Certification that upon full licensure it shall deposit the sum of twenty thousand dollars ($20,000) in cash or securities as approved by the commissioner and having at all times a market value of not less than twenty thousand dollars ($20,000); 

(B)  On or after January 1, 2003, appointment of an agent, including the agent's name and address, for service of process who shall be a resident of the State of Arkansas and who shall be registered with the commissioner pursuant to the provisions of 23-63-301 - 23-63-304. In the event no registered agent has been listed, the commissioner may be served until the appointment of an Arkansas registered agent for service of process has been entered upon the records of the commissioner; 

(C)  A copy of the proposed form of membership application, membership certificate, articles of incorporation or organization or partnership agreement, bylaws, contracts for service, advertising material, and any other data requested by the commissioner; 

(D)  References as to the character, ability, and integrity of the organizers, manager, agent, and any other person through whom the applicant proposes to issue contracts, membership certificates, membership cards, or other documents in return for membership fees or dues; and 

(E)(i)  A full and true statement of its financial condition, transactions, and affairs as of the December 31 next preceding the date of the application. The statement shall be on a calendar-year basis. The statement shall be verified by oath of two (2) officers or directors of the automobile club or association, one (1) of which shall be its president or vice president or secretary. 

(ii)  Financial statements that are consolidated with other affiliates or subsidiaries of the applicant are not acceptable, except for good cause and subsequent approval by the commissioner. 

(iii)  Beginning after December 31, 2002, each applicant shall file an audited financial statement for three (3) calendar years prior to the date of its application in this state. 

(2)  If the commissioner is satisfied that the applicant is qualified and meets all the requirements of this chapter, he or she shall issue to the applicant a certificate of authority to conduct the business of the automobile club or association within this state. 

History. Acts 1955, No. 377, 5; 1981, No. 821, 3; 1983, No. 522, 44; 1985, No. 804, 2; A.S.A. 1947, 75-1605; Acts 2001, No. 1555, 12; 2001, No. 1604, 77.

23-77-107. Certificate of authority - Suspension and revocation.

(a)  The Insurance Commissioner shall suspend or revoke the certificate of authority of an automobile club or association: 

(1)  If the action is required by any provision of 23-77-101, 23-77-106 - 23-77-108; 

(2)  If the automobile club or association no longer meets the requirements for the authority originally granted due to a deficiency in the deposit required by 23-77-106(d)(1)(A) or the failure to maintain a surety bond in such amount as prescribed by 23-77-106(d)(1)(A); or 

(3)  If the automobile club or association is using such methods or practices in the conduct of its business as to render its further operation in Arkansas hazardous or injurious to the public. 

(b)  The commissioner shall give the automobile club or association at least ten (10) days' written notice in advance of any suspension or revocation under this section. 

(c)  The automobile club or association may request a hearing thereon within the ten (10) days. 

History. Acts 1955, No. 377, 12, as added by Acts 1981, No. 821, 4; A.S.A. 1947, 75-1605.1.

23-77-108. Agent or representative license required - Application and issuance.

(a)  Before any agent or representative shall or may represent any automobile club or association in this state, he or she shall first apply to the Insurance Commissioner for a license, and the commissioner shall have full power and authority to issue the license upon proof satisfactory to him that the person is capable of soliciting automobile club or association memberships and is of good moral character and recommended by the club or association in behalf of which the membership solicitations are to be made. 

(b)  No license shall be issued by the commissioner until the applicant has paid to him ten dollars ($10.00) as an annual license fee. 

(c)  The commissioner may reject the application of any person who does not meet the requirements set out in this section. 

History. Acts 1955, No. 377, 6; 1981, No. 821, 2; A.S.A. 1947, 75-1606; Acts 1991, No. 1123, 10.

23-77-109. Annual reports and other information.

(a)  Each licensed automobile club or association shall annually on or before April 1, or within any extension of time therefor which the Insurance Commissioner for good cause may have granted, file with the commissioner a full and true statement of its financial condition, transactions, and affairs as of the December 31 preceding.  The statement shall be in a general form and context as required or not disapproved by the commissioner. 

(b)  It shall be the duty of each licensed automobile club or association to provide any other information which the commissioner may, from time to time, request. 

History. Acts 1955, No. 377, 5; 1985, No. 804, 28; A.S.A. 1947, 75-1605; Acts 1993, No. 901, 38.