Chapter 61.
State
Insurance Department.
§23-61-101. State Insurance Department -
Continuation - Assignment of space.
(a) There is continued at the seat of government
of this state an office or department designated as the State Insurance
Department.
(b) Suitable space shall be assigned for the use
of the department.
(c)(1)(A) The purpose of the department is to serve and
protect the public interest by the equitable enforcement of the state's laws
and regulations affecting the insurance industry.
(B) The primary mission of the department shall
be consumer protection through insurer solvency and market conduct regulation,
and fraud prosecution and deterrence.
(2) Nothing in this subsection shall be construed
to limit the Insurance Commissioner's authority as enumerated in other
provisions of the Arkansas Insurance Code.
§23-61-102.
Insurance Commissioner.
(a) The head of the State Insurance Department
shall be an Insurance Commissioner appointed by the Governor with the advice
and consent of the Senate. No person shall be eligible for appointment as
commissioner unless a citizen of this state and at least thirty (30) years of
age.
(b) The term of office of the commissioner shall
be for a period of four (4) years, commencing on January 15 next following
expiration of the previous four-year term. A person who has been commissioner
is eligible for reappointment for additional terms.
(c) The commissioner shall take and subscribe to
the usual oath of office.
(d) The commissioner shall receive the salary
provided by law.
(e)(1) At the time of taking office, the
commissioner shall execute bond to the State of
(2) The form and surety of the bond shall be
subject to the approval of the Governor and Auditor of State.
(3) An authorized surety insurer shall be the
surety on the bond.
(f)(1) The commissioner shall have an official
seal.
(2) All certificates issued by the commissioner
shall bear his or her seal.
(3) Every document executed by the commissioner
pursuant to law and bearing his or her official seal shall be received as
evidence in any court or other tribunal and may be recorded in the same manner
and with like effect as deeds regularly acknowledged.
§23-61-103.
Insurance Commissioner - Powers and duties.
(a) The Insurance Commissioner shall enforce the
provisions of the Arkansas Insurance Code and shall execute the duties imposed
upon him or her by the Arkansas Insurance Code.
(b) The commissioner shall have the powers and
authority expressly conferred upon him or her by or reasonably implied from the
provisions of the Arkansas Insurance Code.
(c) The commissioner is authorized to enter into
regulatory cooperation and coordination agreements with other governmental
regulatory agencies within and outside of this state with respect to the
regulation of the business of insurance, including, but not limited to:
(1) Licensing of insurance companies;
(2) Licensing of producers;
(3) Regulation of premium rates and policy
forms;
(4) Regulation of insurer solvency and insurance
receiverships; and
(5) Other matters relating to the effective
regulation of the business of insurance.
(d)(1) The commissioner may conduct such
examinations and investigations of insurance matters, in addition to
examinations and investigations expressly authorized, as he or she may deem
proper to determine whether any person has violated any provision of the
Arkansas Insurance Code or to secure information useful in the lawful
administration of any such provision. The cost of these additional examinations
or investigations shall be borne by the state.
(2) Notwithstanding any other provision of law,
active investigatory or examination files as maintained by the State Insurance
Department shall be deemed confidential and privileged and shall not be made
open to the public until:
(A) The matter under investigation or examination
is deemed closed by the commissioner; or
(B) Referred to any law enforcement authority and
made subject to public disclosure by the authority.
(3) At such time that any matter investigated or
examined has been set for an administrative hearing pursuant to § 23-61-304 or
§ 25-15-208, investigation or examination information shall be made available
as provided in § 25-15-208.
(4) Unless otherwise exempted by subdivision
(d)(5) of this section, actuarial formulas and assumptions certified by a
qualified actuary are confidential and privileged when submitted to comply with
a rate or form filing requirement of the department, including, but not limited
to, any actuarial report:
(A) Required, submitted, or attached to any
filing made to the department under § 23-67-211, for rate and form filings of
an insurer, or to those submitted under § 23-63-216 for annual statements of an
insurer; or
(B) Submitted to the department to comply with
any form and rate filing requirement imposed by statute or rule upon licensed
insurers, health maintenance organizations, fraternal benefit societies, and
hospital and medical service corporations.
(5)(A) Subdivisions (d)(2)
and (d)(4) of this section do not prohibit release by the commissioner of
active investigatory or examination files:
(i) At the discretion of the commissioner, to a
person or persons that the commissioner determines to be aggrieved or affected
by the examination or investigation; or
(ii) To state, federal, or local law enforcement
or regulatory agencies or private organizations established for tracking or
preventing insurance violations, or to the National Association of Insurance
Commissioners.
(B) This section shall have no effect on or
application to any of the filings gathered or compiled in compliance with §
23-63-1201 et seq.
(6) Release of active investigatory or
examination files as provided in subdivision (d)(4) of this section does not
abrogate or modify the confidential nature of investigatory or examination
files as provided in subdivision (d)(2) of this section.
(e)(1) The commissioner may delegate to any
assistant, deputy, examiner, or employee of the department the exercise or
discharge in the commissioner's name of any power, duty, or function, whether
ministerial, discretionary, or of whatever character which may be vested by the
Arkansas Insurance Code in the commissioner.
(2) The commissioner shall be responsible for the
official acts of his or her deputy, assistant, examiner, or employee acting in
the commissioner's name and by his or her authority.
§23-61-104. Deputies, assistants, and other
employees - Appointment - Duties.
(a) The Insurance Commissioner may appoint such
assistants and deputies and such examiners, attorneys, clerks, stenographers,
and other personnel as may be necessary to assist him or her in the discharge of
the duties imposed upon him or her under the Arkansas Insurance Code and as may
be authorized by law. All such personnel shall devote their entire business
time to their duties in the State Insurance Department.
(b) The commissioner may employ an actuary on a
consulting or full-time basis to perform such duties as the commissioner may
designate.
(c) The commissioner may at any time terminate
the appointment, designation, or employment of any assistant, deputy, examiner,
attorney, actuary, clerk, or other employee.
(d) The compensation for all such personnel so
appointed or employed shall be as fixed by law.
(e) The commissioner may contract for and procure
on a basis of fee such independently contracting examination, actuarial,
technical, and other professional services as he or she may from time to time
require for the discharge of his or her duties.
(a) In addition to compensation for their services,
the Insurance Commissioner, his or her deputies, assistants, and other
employees shall be paid their actual and necessary expenses as authorized by
the commissioner and incurred by them in the performance of their duties,
subject to such limitations as may be otherwise applicable pursuant to
law.
(b) An itemized statement of all expenses for
which payment is being claimed shall be certified by the claimant and attached
to the expense voucher.
§23-61-106. Commissioner,
deputies, assistants, and other employees - Financial interest prohibited -
Exception.
(a) The Insurance Commissioner or any deputy,
examiner, assistant, or employee of the commissioner shall not be financially
interested, directly or indirectly, in any insurer, insurance agency, or
insurance transaction, except as:
(1) A policyholder or claimant under a
policy;
(2) A grantor of a mortgage or similar instrument
on such person's residence to an entity regulated under the Arkansas Insurance
Code if done under customary terms and in the ordinary course of business;
or
(3) A settlor or
beneficiary of a blind trust into which any otherwise impermissible holdings
have been placed, provided that the commissioner may make reasonable exceptions
upon full and complete written disclosure to the commissioner of the exact
nature and extent of the otherwise impermissible financial interest and
adhering to any and all reasonable restrictions as the commissioner may impose
upon the terms and conditions of employment.
(b) Notwithstanding the requirements of
subsection (a) of this section, the commissioner may employ or retain, from
time to time, insurance actuaries, technicians, or other professional personnel
who are independently practicing their professions even though similarly employed
or retained by insurers or others.
(c) The commissioner or any assistant, deputy,
examiner, or other employee of the commissioner shall not be given nor receive
any fee, compensation, loan, gift, or other thing of value in addition to the
compensation and expense allowance provided pursuant to law for any service
rendered or to be rendered as commissioner, deputy, examiner, or employee, or
in connection therewith.
(a)(1) The Insurance Commissioner shall enter, in
permanent form, records of his or her official transactions, examinations,
investigations, and proceedings and keep these records in his or her
office.
(2) These records and insurance filings in his or
her office shall be open to public inspection, except as otherwise provided in
the Arkansas Insurance Code with respect to particular records or filings.
(3) Confidential data and reports provided to the
commissioner by the National Association of Insurance Commissioners, including,
but not limited to, insurers' Insurance Regulatory Information System ratios
and examiner team synopses, shall be deemed privileged communications. These
data and reports shall not be open to public inspection and shall not be
admissible in evidence in any action or proceeding, other than those brought by
the commissioner, nor shall any insurers, agents, or brokers, which may be the
subject of the confidential reports, have a cause of action against the
commissioner or his or her deputies, examiners, assistants, or employees or
against the National Association of Insurance Commissioners, or its members,
subscribers, officers, directors, assistants, or employees by reason of the
furnishing of any such information to the commissioner.
(4) The commissioner shall maintain as
confidential, and not subject to subpoena, financial information regarding
material transactions of insurers, as defined in § 23-63-1403 or other
applicable laws or regulations promulgated by the commissioner.
(5)(A) In order to assist in the performance of the commissioner's
duties, the commissioner may:
(i) Share documents, materials, or other
information, including confidential and privileged documents, materials, or
information, with other state, federal, and international regulatory and
legislative agencies, with the National Association of Insurance Commissioners
and its affiliates and subsidiaries, and with state, federal, and international
law enforcement authorities, provided that the recipient agrees to maintain the
confidentiality and privileged status of the document, material, communication,
or other information;
(ii) Receive documents, materials, communications,
or information, including otherwise confidential and privileged documents,
materials, or information, from the National Association of Insurance
Commissioners and its affiliates and subsidiaries, and from regulatory,
legislative, and law enforcement officials of other foreign, alien, or domestic
jurisdictions, and shall maintain as confidential or privileged any documents,
materials, or information received with notice or the understanding that it is
confidential or privileged under the laws of the jurisdiction that is the
source of the document, material, or information; and
(iii) Enter into agreements governing sharing and
use of information consistent with this subsection.
(B) No waiver of any applicable privilege or
claim of confidentiality in the documents, materials, or information shall
occur as a result of disclosure to the commissioner under this section or as a
result of sharing as authorized by this subsection.
(C) A privilege established under the law of any
state or jurisdiction that is substantially similar to the privilege
established under this subsection shall be available and enforced in any
proceeding in, and in any court of, this state.
(b) The commissioner may destroy or otherwise
dispose of records and filings in his or her office in accordance with such
rules and procedures as provided by other applicable laws.
(c)(1) Upon request of any person and upon payment
of the applicable fee, the commissioner shall give a certified copy of any
record in his or her office which is then open to public inspection.
(2) Copies of original records or documents in
his or her office certified by the commissioner shall be received in evidence
in all courts as if they were originals.
(3) The commissioner's certificate as to the
authority of any person to transact insurance shall be evidence in all courts
of the facts set forth therein.
(d) In lieu of original signatures of records and
filings, as required by pertinent provisions of the Arkansas Insurance Code,
which are permitted to be reproduced in electronic, diskette, or
computer-readable form acceptable to the commissioner, the commissioner in his
or her discretion may accept electronic, electronic facsimile-transmitted, or
computer-readable signatures subject to such conditions and terms as he or she
may determine.
(a)(1) The Insurance Commissioner may make
reasonable rules and regulations necessary for or as an aid to the effectuation
of any provision of the Arkansas Insurance Code.
(2) No rule or regulation shall extend, modify,
or conflict with any law of this state or the reasonable implications
thereof.
(3) Any rule or regulation affecting persons or
matters other than the personnel or the internal affairs of the commissioner's
office shall be made or amended only after a hearing thereon of which notice
was given as required by § 23-61-304.
(4) If reasonably possible, the commissioner
shall set forth the proposed rule or regulation or amendment in or with the
notice of hearing.
(5) No rule or regulation as to which a hearing
is required under this subsection shall be effective until after it has been on
file as a public record in the commissioner's office, and otherwise as provided
by law, for at least ten (10) days.
(b)(1) The commissioner shall have the authority to
promulgate rules and regulations necessary for the effective regulation of the
business of insurance or as required for this state to be in compliance with
federal laws.
(2) The commissioner shall have the authority to
coordinate regulatory activities and administration with other states and their
appropriate regulatory officials and with the federal government with respect
to the regulation of insurance.
(c) In addition to any other penalty provided,
willful violation of any rule or regulation shall subject the violator to such
denial, suspension, or revocation of certificate of authority or license as may
be applicable under the Arkansas Insurance Code for violation of the provision
to which the rule or regulation relates.
(d)(1) The commissioner is authorized to employ the
standards and requirements set forth in publications recited in the Arkansas
Insurance Code, as those publications existed on January 1, 2001, and adopted
and published by the National Association of Insurance Commissioners or by
other authors in the regulation of insurance, including, but not limited to,
the Valuation of Securities Manual, the Examiners Handbook, the Accounting
Practices and Procedures Manual, and the Annual Statement Instructions as
published by the National Association of Insurance Commissioners.
(2) The publications identified in subdivision (d)(1) of this section and others recited in and throughout §
23-60-101 et seq. are hereby adopted as they existed on January 1, 2001.
(3) The commissioner is authorized and empowered
to promulgate regulations for the purposes of adopting all or part of other
publications of the National Association of Insurance Commissioners or
publications by other authors if the commissioner determines that such an
action is in the best interest of the public.
(4) Upon the mailing of written notice by the
commissioner to all domestic reporting entities of promulgation and publication
by the National Association of Insurance Commissioners or other authors of
amendments, revisions, or modifications to any publication previously adopted
by the commissioner in the Arkansas Insurance Code, such published amendments,
revisions, or modifications shall become effective on the date designated by
the commissioner in the written notice, which date shall not be earlier than
eight (8) months after the date of mailing of the notice.
(e) The commissioner is authorized and empowered
to adopt regulations for the purpose of modifying, amending, or revising any
publication promulgated by the National Association of Insurance Commissioners
or other authors, or any published amendments, modifications, or revisions to
any such publications if the commissioner determines that such an action is in
the best interest of the public. In such an event the effective date of any
modification, amendment, or revision shall be the effective date of the regulation.
(a) Orders and notices of the Insurance
Commissioner shall be effective only when in writing signed by the commissioner
by his or her authority.
(b) Every order shall state its effective date and
shall concisely state:
(1) Its intent or purpose;
(2) The grounds on which based; and
(3) The provisions of the Arkansas Insurance Code
pursuant to which action is taken or proposed to be taken, but failure to so
designate all applicable provisions shall not deprive the commissioner of the
right to rely thereon.
(c) Except as may be provided in the Arkansas
Insurance Code respecting particular procedures, an order or notice may be
given by service upon or delivery to the person to be ordered or notified or by
mailing it, postage prepaid, addressed to the person at his or her principal
place of business as last of record in the department.
(a)(1)(A) The Insurance Commissioner may institute such
suits or other legal proceedings as may be required for enforcement of any
provisions of the Arkansas Insurance Code.
(B) In addition, the commissioner may intervene
in any civil suit or administrative hearing initiated by another party against
any person or entity regulated by the commissioner under the Arkansas Insurance
Code, which suit or proceeding directly relates to the financial condition and
solvency of such a person or entity.
(C) Nothing in this subsection shall be construed
to limit the commissioner's authority as enumerated in other provisions of the
Arkansas Insurance Code.
(2) If the commissioner has reason to believe
that any person has violated any provision of the Arkansas Insurance Code for
which criminal prosecution would be in order, he or she shall so inform the
prosecuting attorney in whose district any purported violation may have
occurred or the Criminal Investigation Division of the State Insurance
Department.
(3) If the commissioner finds that any person has
violated any provision of the Arkansas Insurance Code, he or she may order
restitution of actual losses to affected persons in addition to the denial,
suspension, or revocation of any license or certificate or the imposition of
any administrative or civil penalty.
(b) The commissioner may proceed in the courts of
this state or any reciprocal state to enforce an order or decision in any court
proceeding or in any administrative proceeding before the commissioner.
(a) As used in this section and § 23-61-110:
(1) "Foreign decree" means any decree
or order in equity of a court located in a reciprocal state, including a court
of the United States located therein, against any insurer incorporated or
authorized to do business in this state; and
(2) "Reciprocal state" means any state
or territory of the United States the laws of which contain procedures
substantially similar to those specified in this section for the enforcement of
decrees or orders in equity issued by the courts located in other states or
territories of the United States against any insurer incorporated or authorized
to do business in the state or territory.
(b) The Insurance Commissioner shall determine
which states and territories qualify as reciprocal states and shall maintain at
all times an up-to-date list of the states.
(c)(1) A copy of any foreign decree authenticated in
accordance with the statutes of this state may be filed in the office of the
clerk of any circuit court of this state.
(2) The clerk, upon verifying with the
commissioner that the decree or order qualifies as a foreign decree shall treat
the foreign decree in the same manner as a decree of a circuit court of this
state.
(3) A foreign decree so filed has the same effect
and shall be deemed as a decree of a circuit court of this state. The decree is
subject to the same procedures, defenses, and proceedings for reopening,
vacating, or staying as a decree of a circuit court of this state and may be
enforced or satisfied in like manner.
(d)(1) At the time of the filing of the foreign
decree, the commissioner shall make and file with the clerk of the court an
affidavit setting forth the name and last known post office address of the
defendant.
(2) Promptly upon the filing of the foreign
decree and the affidavit, the clerk shall mail notice of the filing of the
foreign decree to the defendant at the address given and to the commissioner of
this state and shall make a note of the mailing in the docket. In addition, the
commissioner may mail a notice of the filing of the foreign decree to the
defendant and file proof of mailing with the clerk. Lack of mailing notice of
filing by the clerk shall not affect the enforcement proceedings if proof of
mailing by the commissioner has been filed.
(3) No execution or other process for enforcement
of a foreign decree filed pursuant to this section shall issue until thirty
(30) days after the date the decree is filed.
(e)(1) If the defendant shows the circuit court that
an appeal from the foreign decree is pending or will be taken, or that a stay
of execution has been granted, the court shall stay enforcement of the foreign
decree until the appeal is concluded, the time for appeal expires, or the stay
of execution expires or is vacated, upon proof that the defendant has furnished
the security for the satisfaction of the decree required by the state in which
it was rendered.
(2) If the defendant shows the circuit court any
ground upon which enforcement of a decree of any circuit court of this state
would be stayed, the court shall stay enforcement of the foreign decree for an
appropriate period, upon requiring the same security for satisfaction of the
decree which is required in this state.
(f) Any person filing a foreign judgment or
decree shall pay to the clerk of the court the fee prescribed in § 21-6-402.
Fees for docketing, transcription, or other
enforcement proceedings shall be as provided for judgment or decrees of the
circuit court of this state.
As early in the calendar year
as reasonably possible, the Insurance Commissioner annually shall prepare and
deliver a report to the Governor showing, with respect to the preceding
calendar year:
(1) Names of the authorized insurers transacting
insurance in this state, with such summary of their financial statements as the
commissioner deems proper;
(2) Names of insurers whose businesses were
closed during the year, the cause thereof, and the amount of assets and
liabilities as ascertainable;
(3) Names of insurers against which delinquency
or similar proceedings were instituted and a concise statement of the facts
with respect to each proceeding;
(4) The receipts and expenses of the State
Insurance Department for the year;
(5) Recommendations of the commissioner as to
amendments or supplementation of laws affecting insurance and as to matters
affecting the department; and
(6) Such other pertinent information and matters
as the commissioner deems proper.
(a) No person shall disclose any nonpublic
personal information contrary to the provisions of Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L.
No. 106-102.
(b) The Insurance Commissioner shall adopt rules
and regulations governing the treatment of consumer financial and protected
health information by the Arkansas Comprehensive Health Insurance Pool and by
all licensed insurers, health maintenance organizations, or other insuring
health entities regulated by the commissioner, producers, and other persons
licensed or required to be licensed, authorized or required to be authorized,
or registered or required to be registered by the commissioner.
(c)(1) The commissioner shall waive any provision of
this section that creates any conflict with similar federal laws or
regulations, or which, due to the enactment of any such similar federal laws or
regulations, creates an undue burden or increased financial or operational
demands upon any person or entity referenced in subsection (b) of this section
in order to comply with this section, the regulations to be promulgated by the
commissioner, and similar federal laws and regulations.
(2) Any person or entity referenced in subsection
(b) of this section may request a hearing before the commissioner to seek the
waiver referenced in subdivision (c)(1) of this
section.
(3)(A) Under § 23-61-307, any person or entity
referenced in subsection (b) of this section is entitled to appeal the
commissioner's decision to deny a waiver.
(B) In any appeal pursuant to this section, the
commissioner shall be named as defendant.
(C) In any such action, the commissioner may but
shall not be obligated to defend the action, in his or her discretion.
(a) The Insurance Commissioner shall conduct an
annual study of malpractice insurance rates in
(b) The study shall include:
(1) Any findings regarding any changes in medical
malpractice rates;
(2) Any other finding that is relevant to
malpractice insurance rates; and
(3) Any recommendations in respect to any law
relating to medical malpractice insurance.
(c) The report shall be submitted no later than
August 1 subsequent to the year studied.
(a) The principles expressed in subsection (b) of
this section shall serve as standards to be followed by the Insurance
Commissioner in:
(1) Exercising the commissioner's powers and
duties;
(2) Exercising administrative discretion;
(3) Dispensing administrative interpretations of
the law; and
(4) Adopting rules and regulations.
(b) Policyholders shall have the right to:
(1) Competitive pricing practices and marketing
methods that enable them to determine the best value among comparable
policies;
(2) Insurance advertising and other selling
approaches that provide accurate and balanced information on the benefits and
limitations of a policy;
(3) An insurer that is financially stable;
(4) Be serviced by a competent, honest insurance
producer;
(5) A readable policy;
(6) An insurer that provides an economic delivery
of coverage and that tries to prevent losses; and
(7) Balanced and positive regulation by the State
Insurance Department.
(c) This section shall not be construed as
creating, extinguishing, repealing, or limiting any civil cause of action.
(a)(1) The Insurance Commissioner shall examine the
affairs, transactions, accounts, records, market conduct activity, and assets
of each authorized insurer as often as in the commissioner's sole discretion he
or she deems advisable.
(2) The commissioner shall so examine each
authorized insurer not less frequently than every five (5) years.
(3) Examination of an alien insurer shall be
limited to its insurance transactions and affairs in the
(4) In scheduling and determining the nature,
scope, and frequency of the examinations, the commissioner shall consider such
matters as the results of financial statement analyses and ratios, changes in
management or ownership, actuarial opinions, reports of independent certified
public accountants, and other criteria as set forth in the most current edition
of the applicable Examiners' Handbook and other standards adopted by the
National Association of Insurance Commissioners and in effect when the
commissioner exercises discretion to conduct an examination under subdivision
(a)(1) of this section.
(b) The commissioner may, in like manner, examine
each insurer applying for an initial certificate of authority to transact
insurance in this state.
(c) In lieu of making his or her own examination
of any foreign or alien insurer authorized in this state, the commissioner may,
in his or her discretion, accept a full report of the last recent examination
of a foreign or alien insurer as prepared by the insurance department for the
company's state of domicile or port-of-entry state. After January 1, 1994, such
reports may only be accepted by the commissioner if:
(1) The insurance department preparing such
report was at the time of the examination accredited under the National
Association of Insurance Commissioners' Financial Regulation Standards and
Accreditation Program; or
(2) The examination was performed with the
participation of one (1) or more examiners employed by such an accredited state
insurance department, who, after a review of the examination work papers and
report, state under oath that the examination was performed in a manner
consistent with the standards and procedures required by their accredited
insurance department.
(d) As far as practical, the examination of a
foreign or alien insurer shall be made in cooperation with the insurance
supervisory officials of other states in which the insurer transacts business.
For the purposes of
completing an examination of any company under this subchapter, the Insurance
Commissioner may, as often as he or she deems advisable, examine or investigate
any person, or the business of any person, insofar as such an examination or
investigation is, in the sole discretion of the commissioner, necessary or
material to the examination of the company.
(a) Upon determining that an examination should
be conducted, the Insurance Commissioner shall issue an examination certificate
of authority appointing one (1) or more examiners to perform the examination
and instructing them as to the scope of the examination. In conducting the
examination, the examiner shall observe those guidelines and procedures set
forth in the most current edition of the applicable Examiners' Handbook adopted
by the National Association of Insurance Commissioners. The commissioner may
also employ such other guidelines or procedures as the commissioner may deem
appropriate.
(b) When making an examination under this
subchapter, the commissioner may retain attorneys, appraisers, independent
actuaries, independent certified public accountants, or other professionals and
specialists as examiners, the cost of which shall be borne by the company which
is the subject of the examination.
(c)(1) The commissioner may also accept as a part of
the State Insurance Department's examination of any insurer or person:
(A) A report by an independent actuary deemed
competent by the commissioner; or
(B) A report of an audit made by an independent
certified public accountant.
(2) Neither those persons so designated nor any
members of their immediate families shall be officers of, connected with, or
financially interested in any insurer other than as policyholders, nor shall
they be financially interested in any other corporation or person affected by
the examination, investigation, or hearing.
(a)(1) Every company or person from whom information
is sought, its officers, directors, and agents, must provide to the examiners
appointed under § 23-61-203 timely, convenient, and free access at all
reasonable hours at its offices to all books, records, accounts, papers,
documents, and any or all computer or other recordings relating to the
property, assets, business, and affairs of the company being examined. The officers, directors, employees, and
agents of the company or person must facilitate such an examination and aid in
such an examination so far as it is in their power to do so.
(2) The refusal of any company, by its officers,
directors, employees, or agents, to submit to examination or to comply with any
reasonable written request of the examiners shall be grounds for suspension,
revocation, or refusal of, or nonrenewal of, any license or authority held by
the company to engage in an insurance or other business subject to the
Insurance Commissioner's jurisdiction.
Any such proceedings for suspension, revocation, or refusal of any
license or authority shall be conducted pursuant to § 23-63-213.
(b) If the commissioner finds the accounts to be
inadequate or inadequately kept or posted, he or she may employ experts to
rewrite, post, or balance them at the expense of the person being examined if
the person has failed to complete or correct the accounting after the
commissioner has given the person notice and a reasonable opportunity to do
so.
(c)(1) If the commissioner deems it necessary to
value any property involved in an examination, he or she may make written
request of the person being examined to appoint one (1) or more competent
appraisers, approved by the commissioner, for the purpose of appraising the
property.
(2) If no appointment is made within ten (10)
days after this request was delivered to the person, then the commissioner may
appoint the appraiser or appraisers.
(3) Any such appraisal shall be promptly made,
and a copy of the report shall be furnished to the commissioner.
(4) The reasonable expense of the appraisal shall
be borne by the person being examined.
(d) Nothing contained in this subchapter shall be
construed to limit the commissioner's authority to terminate or suspend any
examination in order to pursue other legal or regulatory action pursuant to the
insurance laws of this state. Findings
of fact and conclusions made pursuant to any examination shall be prima facie
evidence in any legal or regulatory action.
(e) Nothing contained in this subchapter shall be
construed to limit the commissioner's authority to use and, if appropriate, to
make public any final or preliminary examination report, any examiner or
company work papers or other documents, or any other information discovered or
developed during the course of any examination in the furtherance of any legal
or regulatory action which the commissioner may, in his or her sole discretion,
deem appropriate.
(a) Each person so examined shall pay to the
State Insurance Department the actual travel expenses, reasonable living
expense allowance, and compensation for examiners and other persons assisting
in the examination on a basis not to exceed the total of the Geographical
Expense Reimbursement Plan set forth in the most current edition of the
applicable Examiners' Handbook adopted by the National Association of Insurance
Commissioners, upon presentation of a detailed account of the charges and
expenses.
(b)(1) Payments for travel expenses and living
expense allowance received by the department for each examination shall be
deposited as cash funds.
(2) Reimbursement shall be made from these funds
to examiners and others assisting in the examination.
(3) Per diem charges of examiners and others
assisting in the examination shall be computed beginning at the time of reporting
for duty at the office of the company to be examined and terminating upon
completion of the examination or the examiner's active participation therein
and to include actual days for travel as certified by the Insurance
Commissioner. If air travel is used, only one (1) day's travel time will be
authorized. If an automobile is used, travel time allowed shall be computed at
the rate of not less than four hundred (400) miles per day as determined by the
Rand McNally Road Map, with the actual mileage traveled compensated at the most
current rate per mile approved for state employees.
(4) Examiners and others assisting in the
examination shall not be reimbursed for travel time or travel expenses not
actually incurred in connection with an assignment, nor shall they be
reimbursed for dual living expenses while on branch office assignments.
(5) Examiners and others assisting in the
examination, when participating in or conducting an examination of a foreign company, shall be authorized to return to their state of
domicile every other weekend. Their expenses will be paid based upon the lesser
of airfare or mileage. The reimbursement shall be made in lieu of the per diem
allowance. The travel shall be accomplished with a minimum amount of work time
lost.
(c) Payments for employee compensation received
by the department shall be deposited by the commissioner into the State
Treasury to be credited to the State Insurance Department Trust Fund used for
the maintenance, operation, and support of the department.
(d) No person shall pay, and no examiner shall
accept, any additional emolument on account of any examination.
(a) Each person so examined shall pay to the
State Insurance Department the actual travel expenses, reasonable living
expense allowance, and compensation for examiners and other persons assisting
in the examination on a basis not to exceed the total of the Geographical
Expense Reimbursement Plan set forth in the Examiners' Handbook adopted by the
National Association of Insurance Commissioners, upon presentation of a
detailed account of the charges and expenses.
(b)(1) Payments for travel expenses and living
expense allowance received by the department for each examination shall be
deposited as cash funds.
(2) Reimbursement shall be made from these funds
to examiners and others assisting in the examination.
(3) Per diem charges of examiners and others
assisting in the examination shall be computed beginning at the time of reporting
for duty at the office of the company to be examined and terminating upon
completion of the examination or the examiner's active participation therein
and to include actual days for travel as certified by the Insurance
Commissioner. If air travel is used,
only one (1) day's travel time will be authorized. If an automobile is used, travel time allowed
shall be computed at the rate of not less than four hundred (400) miles per day
as determined by the Rand McNally Road Map, with the actual mileage traveled
compensated at the most current rate per mile approved for state
employees.
(4) Examiners and others assisting in the
examination shall not be reimbursed for travel time or travel expenses not
actually incurred in connection with an assignment, nor shall they be
reimbursed for dual living expenses while on branch office assignments.
(5) Examiners and others assisting in the
examination, when participating in or conducting an examination of a foreign company, shall be authorized to return to their state of
domicile every other weekend. Their
expenses will be paid based upon the lesser of airfare or mileage. The reimbursement shall be made in lieu of
the per diem allowance. The travel shall
be accomplished with a minimum amount of work time lost.
(c) Payments for employee compensation received
by the department shall be deposited by the commissioner in the State Treasury
to be credited to the State Insurance Department Trust Fund used for the
maintenance, operation, and support of the department.
(d) No person shall pay, and no examiner shall
accept, any additional emolument on account of any examination.
All working papers, recorded
information, documents, and copies produced by, obtained by, or disclosed to
the Insurance Commissioner or any other person in the course of an examination
made under this subchapter must be given confidential treatment and are not
subject to subpoena and may not be made public by the commissioner or any other
person, except to the extent provided in § 23-61-205. In addition, all workpapers, financial statement analyses, ratio
calculations, and any other materials produced by State Insurance Department
financial examiners or analysts, or documents submitted or disclosed to the
department by an insurer in response to a request from a department financial
examiner or analyst during the course of reviewing or investigating the
financial solvency, condition, or affairs of an insurer, shall be confidential and
not subject to subpoena, except to the extent as provided in § 23-61-205.
Access may also be granted to the National Association of Insurance
Commissioners. The parties must agree in writing prior to receiving the
information to provide to it the same confidential treatment as required by
this section, unless the prior written consent of the company to which it
pertains has been obtained.
(a) No cause of action shall arise nor shall any
liability be imposed against the Insurance Commissioner, the commissioner's
authorized representatives, or any examiner appointed by the commissioner for
any statements made or conduct performed in good faith while carrying out the
provisions of this subchapter.
(b) No cause of action shall arise, nor shall any
liability be imposed against any person for the act of communicating or
delivering information or data to the commissioner or the commissioner's
authorized representative or examiner pursuant to an examination made under this
subchapter, if such an act of communication or delivery was performed in good
faith and without fraudulent intent or the intent to deceive.
(c) This section does not abrogate or modify in
any way any common law or statutory privilege or immunity heretofore enjoyed by
any person identified in subsection (a) of this section.
(d) A person identified in subsection (a) of this
section shall be entitled to an award of attorney's fees and costs, if that
person is the prevailing party in a civil cause of action for libel, slander,
or any other relevant tort arising out of his or her activities in carrying out
the provisions of this subchapter, and the party bringing the action was not
substantially justified in doing so. For purposes of this section, a proceeding
is "substantially justified" if it had a reasonable basis in law or
fact at the time it was initiated.
(a) With respect to the subject of any
examination, investigation, or hearing being conducted by the Insurance
Commissioner, the commissioner may subpoena witnesses and administer oaths or
affirmations and examine any individual under oath and may require and compel
the production of records, books, papers, contracts, and other documents.
(b)(1) Witness fees and mileage shall not be allowed
as to any licensee of the commissioner.
(2) Witness fees and mileage of persons or
entities not licensees of the commissioner, if claimed, shall be allowed the
same as for testimony in a circuit court. Provided, however, that such a claim
must be made at the time, date, and place of the hearing to which the person or
entity has been summoned, and the amount thereof shall be processed in the same
manner as are State Insurance Department employees' requests for expense
reimbursement from the State of Arkansas.
(3) Witness fees, mileage, and the actual expense
necessarily incurred in securing attendance of witnesses and their testimony
shall be itemized and shall be paid by the person being examined or
investigated if, in the proceedings in which the witness is called, the person
is found to have been in violation of the law, or paid by the person, if other
than the commissioner, at whose request the hearing is held.
(c)(1) Subpoenas of witnesses shall be served in the
same manner as if issued by a circuit court and may be served by certified
mail.
(2) If any individual fails to obey a subpoena issued
and served pursuant to this section with respect to any matter concerning which
he or she may be lawfully interrogated, upon application of the commissioner,
the circuit court of the county in which is pending the proceeding at which the
individual was required to appear may issue an order requiring the individual
to comply with the subpoena and to testify.
(3) Any failure to obey the order of the court
may be punished by the court as a contempt
thereof.
(d) If any officer, director, or manager of an
insurer has refused, in connection with examination of the insurer by the
commissioner, to be examined under oath concerning its affairs, then the
commissioner is authorized to conduct and enforce by all appropriate and
available means any examination under oath in any state or territory of the
United States in which any officer, director, or manager may then presently be
to the full extent permitted by the laws of the state or territory, this
special authorization considered.
(e) Any person willfully testifying falsely under
oath in this state as to any matter material to any examination, investigation,
or hearing shall, upon conviction, be guilty of perjury and punished
accordingly.
(a)(1) If any person asks to be excused from
attending or testifying or from producing any books, papers, records,
correspondence, or other documents at or in connection with any examination,
hearing, or investigation being conducted by the Insurance Commissioner or his
or her examiner on the ground that the testimony or evidence required of the
person may tend to incriminate the person or subject him or her to a penalty or
forfeiture and shall, notwithstanding, be directed to give the testimony or
produce the evidence, the person must nonetheless comply with the direction,
but he or she shall not thereafter be prosecuted or subjected to any penalty or
forfeiture for or on account of any transaction, matter, or thing concerning
which he or she may testify or produce evidence pursuant thereto.
(2) No testimony so given or evidence produced
shall be received against him or her upon any criminal action, investigation,
or proceeding, except that no individual so testifying shall be exempt from
prosecution or punishment for any perjury committed by him or her while
testifying and the testimony or evidence so given or produced shall be
admissible against him or her upon any criminal action, investigation, or
proceeding concerning the perjury; nor shall he or she be exempt from the
refusal, suspension, or revocation of any license, permission, or authority
conferred, or to be conferred, pursuant to the Arkansas Insurance Code.
(b)(1) Any such individual may execute, acknowledge,
and file in the State Insurance Department a statement expressly waiving
immunity or privilege in respect to any transaction, matter, or thing specified
in the statement, and, thereupon, the testimony of the person or the evidence
in relation to the transaction, matter, or thing may be received or produced
before any judge or justice, court, tribunal, grand jury, or otherwise.
(2) If so received or produced, the individual
shall not be entitled to any immunity or privilege on account of any testimony
he or she may so give or evidence so produced.
(a) The Insurance Commissioner may hold hearings
for any purpose within the scope of the Arkansas Insurance Code deemed by him
or her to be necessary.
(b)(1) The commissioner shall hold a hearing if
required by any provision or upon written demand for a hearing by a person
aggrieved by any act, threatened act, or failure of the commissioner to act, or
by any report, rule, regulation, or order of the commissioner, other than an
order for the holding of a hearing, or an order on hearing or pursuant
thereto.
(2) Any demand shall specify the grounds to be
relied upon as a basis for the relief to be demanded at the hearing, and,
unless postponed by mutual consent, the hearing shall be held within thirty
(30) days after receipt by the commissioner of the demand.
(c) Pending the hearing and decision thereon, the
commissioner may suspend or postpone the effective date of the commissioner's
previous action.
(a) Not less than ten (10) days in advance, the
Insurance Commissioner shall give notice of the time and place of the hearing,
stating the matters to be considered at the hearing.
(b) If the persons to be given notice are not specified
in the provisions pursuant to which the hearing is held, the commissioner shall
give notice to all persons to be directly and immediately affected by the
hearing.
(a) Hearings may be closed to the public at the
Insurance Commissioner's discretion, except that a hearing shall be open to the
public if so requested in writing by any party to the hearing.
(b) The commissioner shall allow any party to the
hearing to appear in person and by counsel, to be present during the giving of
all evidence, to have a reasonable opportunity to inspect all documentary
evidence and to examine witnesses, to present evidence in support of his or her
interest, and to have subpoenas issued by the commissioner to compel attendance
of witnesses and production of evidence in his or her behalf.
(c) The commissioner shall permit to become a
party to the hearing by intervention, if timely, only those persons who were
not original parties to the hearing and whose pecuniary interests are to be
directly and immediately affected by the commissioner's order made upon the
hearing.
(d) Formal rules of pleading or evidence need not
be observed at any hearing.
(e)(1) Upon written request timely made by a party
to the hearing and at that person's expense, the commissioner shall cause a
full stenographic record of the proceedings to be made by a competent
reporter.
(2) If transcribed, a copy of the stenographic
record shall be furnished to the commissioner. Notwithstanding the provisions
of the Arkansas Administrative Procedure Act, § 25-15-201 et seq., the transcribed
stenographic record shall be furnished to the commissioner without cost to the
commissioner or the state and shall be a part of the commissioner's record of
the hearing.
(3) If so transcribed, a copy of the stenographic
record shall be furnished to any other party to the hearing at the request and
expense of the other party.
(4) If no stenographic record is made or
transcribed, the commissioner shall prepare an adequate record of the evidence
and of the proceedings.
(f) Upon written request of a party to a hearing
filed with the commissioner within thirty (30) days after any order made
pursuant to a hearing has been mailed or delivered to the persons entitled to
receive the order, the commissioner, in his or her discretion, may grant a
rehearing or reargument of the matters involved in
the hearing, and notice of the rehearing or reargument
shall be given as provided in § 23-61-304.
(a) In the conduct of any hearing under the
Arkansas Insurance Code and making his or her order thereon, the Insurance
Commissioner shall act in a quasi-judicial capacity.
(b) Within thirty (30) days after termination of
the hearing or of any rehearing thereof or reargument
thereon, the commissioner shall make his or her order on hearing, covering
matters involved in that hearing and in any rehearing or reargument
and shall give a copy of the order to the same persons given notice of the
hearing and to all parties to the hearing.
(c) The order shall contain a concise statement
of the facts as found by the commissioner and of his or her conclusions from
those facts and the matters required by § 23-61-109.
(d) The order may affirm, modify, or nullify
action theretofore taken and may constitute the taking of new action within the
scope of the notice of hearing.
(a) An appeal from the Insurance Commissioner
shall be taken only from an order on hearing or with respect to a matter as to
which the commissioner has refused or failed to grant or hold a hearing after
demand therefor under § 23-61-303 or as to a matter
as to which the commissioner has refused or failed to make his or her order on
hearing as required by § 23-61-306.
(b) Any person who was a party to the hearing, or
whose pecuniary interests are directly and immediately affected by the refusal
or failure to grant a hearing, and who is aggrieved by the order, refusal, or failure
may appeal from the order on hearing or as to any such matter within thirty
(30) days after:
(1) The order on hearing has been mailed or
delivered to the persons entitled to receive it;
(2) The commissioner's order denying rehearing or
reargument has been so mailed or delivered;
(3) The commissioner has refused or failed to
make his or her order on hearing as required under § 23-61-306; or
(4) The commissioner has refused or failed to
grant or hold a hearing as required under § 23-61-303.
(c) The appeal shall be granted as a matter of
right and shall be taken to the Circuit Court of Pulaski County by filing
written notice of appeal in the court and by filing a copy of the notice with
the commissioner, except that, in appeals from the refusal, suspension, or
revocation of the license of an agent, broker, solicitor, or surplus line
broker, the person taking the appeal may at his or her option take the appeal
to the circuit court of the county in which the person resides instead of to the
Circuit Court of Pulaski County.
(d) Upon filing of the notice of appeal therein,
the court shall have full jurisdiction and shall determine whether the filing
shall operate as a stay of the order or action appealed from and shall have the
right at any time thereafter to issue such other temporary or preliminary
orders as to it may seem proper until a final decree is rendered.
(e) Within thirty (30) days after filing of the
copy of notice of appeal in his or her office, or within such further time as
the court may allow, the commissioner shall make, certify, and deposit in the
office of the clerk of the court in which the appeal is pending a full and
complete transcript of all proceedings had before the commissioner and all
evidence before him or her in the matter, including all his or her files
therein.
(f) Upon receipt of the transcript, evidence, and
files, the court, as soon as reasonably possible thereafter, shall review the
action of the commissioner appealed from.
(g)(1) Any appeal shall be upon the basis of the
record so presented.
(2) In any review the findings of the
commissioner as to the facts, if supported by substantial evidence, shall be
conclusive.
(3) If any party shall apply to the court for
leave to adduce additional evidence and shall show to the satisfaction of the
court that the additional evidence is material and that there were reasonable
grounds for the failure to adduce the evidence in the proceedings before the
commissioner, the court may order the additional evidence to be taken before
the commissioner and to be adduced upon the hearing in such manner and upon
such terms and conditions as the court may deem proper.
(4) The commissioner may modify his or her
findings of fact or make new findings by reason of the additional evidence
taken pursuant to subdivision (g)(3) of this section.
The commissioner shall file the modified or new findings, which, if supported
by substantial evidence, shall be conclusive, and his or herrecommendation,
if any, for the modification or setting aside of his or her original order with
the return of the additional evidence.
(h) After hearing the appeal the court may
affirm, modify, or reverse the order or action of the commissioner in whole or
in part, or may remand the action to the commissioner for further proceedings
in accordance with the court's direction.
(i) Costs shall be awarded as in civil
actions.
(j)(1) Appeal may be taken to the Arkansas Supreme
Court or the Arkansas Court of Appeals from the judgment of the circuit court
as in other civil cases.
(2) The circuit court judgment appealed from
shall not be subject to supersedeas, and a stay of
the effectiveness of any judgment may be made only by order of the Arkansas
Supreme Court or the Arkansas Court of Appeals upon the giving of such security
as the court deems proper.
The Insurance Commissioner
shall collect in advance, and persons so served shall pay to the Treasurer of
State through the commissioner, fees, licenses, and miscellaneous charges as
follows:
(1) Admission fees:
(A) Filing and reviewing all
documents necessary for issuance of certificate of incorporation for domestic
companies ............................................................$100.00
(B) Issuance of an original
certificate of incorporation for domestic companies
..............................................................50.00
(C) Reviewing all documents
necessary for issuance of original
certificate of authority
..............................................500.00
(D) Issuance of original
certificate of authority for all companies
.......................................................................150.00
(E) Issuance of original
license for rate service organizations and
employer service assurance organizations
..............................500.00
(F) Filing and reviewing all
documents of a nonadmitted company seeking to be
placed on the "approved" list for the writing of surplus lines
insurance .............................................................500.00
(2) Annual renewal fees:
(A) Filing an annual
statement for all companies ...............50.00
(B) Renewal of a certificate
of authority for all companies .............................................................100.00
(C) Rate service
organizations and employer service assurance
organizations, annual continuation of license
.........................100.00
(3) Other miscellaneous fees:
(A) Amendment to articles of
incorporation .....................25.00
(B) Reinstatement of
certificate of authority ..................50.00
(C) Amending an existing
certificate of authority .............100.00
(4) Agent's license for resident agents:
(A) Property, casualty,
surety agents:
Original issuance of each
license .............................15.00
Appointment of agent by
insurer, each insurer .................10.00
Annual continuation of
appointment, each insurer ..............10.00
(B) Life and accident and
health insurance agents:
Appointment of agent by
insurer, each insurer .................10.00
Annual continuation of
appointment, each insurer ..............10.00
(C) Each vending machine
licensed under § 23-64-221, each year .10.00
(5) Broker's license for resident brokers:
(A) Original license
..........................................30.00
(B) Annual continuation of
license ............................30.00
(6) Nonresident broker (corporate) license:
(A) Original license
...........................................30.00
(B) Annual continuation of
license .............................30.00
(7) Nonresident broker license:
(A) Original license
..........................................30.00
(B) Annual continuation of
license ............................30.00
(8) Nonresident agent license:
(A) Original license,
individual ..............................30.00
(B) Annual continuation of
license, individual ................30.00
(C) Original license,
nonresident firms and corporations plus one (1) qualifying individual
.............................................100.00
(D) Each additional
individual ................................30.00
(E) Annual continuation of
nonresident firms and corporation license
.......................................................................100.00
(F) Annual continuation of
each additional individual .........30.00
(9) Temporary license:
(A) As resident agent
..........................................10.00
(B) As resident broker
.........................................25.00
(10) Examination for agent or broker license:
(A) Filing application for
examination for agent or broker .....10.00
(B) Filing application for
reexamination for agent or broker ....5.00
(11) Surplus line broker license:
(A) Original license,
individual ............................1,000.00
(B) Original license, firms
and corporations plus one qualifying
individual
..........................................................1,000.00
(C) Each additional
individual ................................100.00
(D) Annual continuation of license .............................25