§ 23-102-108 — Powers

Arkansas § 23-102-108

• Jurisdiction: Arkansas
• Title: 23

Text

(a) The Board of the Arkansas Earthquake Authority shall have the general powers and authority granted under the laws of the State of Arkansas and in addition thereto, the specific authority to: (1) Enter into contracts as are necessary or proper to carry out the provisions and purposes of this chapter; (2) Assess insurers pursuant to § 23-102-112 regarding funding of the Arkansas Earthquake Authority; (3) Set an appropriate policyholder surcharge for insurers entering the residential homeowner, farmowner, fire and allied lines, and earthquake markets after an event. This surcharge shall be remitted to the Arkansas Earthquake Authority based on these insurers' not having paid the post-event assessments contained in § 23-102-112 . The board shall determine the period of time during which this surcharge shall be applicable; (4) Sue or be sued, including taking any legal actions necessary or proper; (5) Take such legal action as necessary, including, but not limited to: (A) Avoiding the payment of improper claims against the Arkansas Earthquake Authority or the coverage provided by or through the Arkansas Earthquake Authority; (B) Recovering any amounts erroneously or improperly paid by the Arkansas Earthquake Authority; (C) Recovering any amounts paid by the Arkansas Earthquake Authority as a result of mistake of fact or law; (D) Recovering other amounts due the Arkansas Earthquake Authority; or (E) Coordinating legal action with the Insurance Commissioner to enforce the provisions of this chapter; (6) Establish and modify from time to time as appropriate the rates, rate schedules, expense allowances, agent fees, deductibles, and any other actuarial function appropriate to the operation of the Arkansas Earthquake Authority; (7) Issue policies of residential earthquake insurance or reinsurance in accordance with the requirements of this chapter. All policy forms shall be subject to the approval of the commissioner; (8) Authorize the Executive Director of the Arkansas Earthquake Authority or the Plan Administrator of the Arkansas Earthquake Authority to prepare and distribute instruction and application forms to agents and to the general public; (9) (A) Borrow money and issue or contract with another state authority, including the Arkansas Development Finance Authority, to be issued on its behalf negotiable evidences of debt, including bonds payable from and secured by a pledge of the Arkansas Earthquake Authority of all or any part of the revenues of the Arkansas Earthquake Authority to finance the activities authorized by this chapter and sell those bonds at public or private sale in the form and on those terms and conditions as approved by the board. (B) Proceeds of bonds and the revenues pledged to secure or pay bonds shall be cash funds and shall not be deposited into the State Treasury. (C) (i) Bonds shall be special obligations of the Arkansas Earthquake Authority, secured solely by and payable from the revenues of the Arkansas Earthquake Authority. The funds, credit, property, or taxing power of the state or political subdivisions of the state shall not be pledged for the payment of such bonds. (ii) In the discretion of the board and subject to approval by the commissioner, the Arkansas Development Finance Authority shall be authorized and empowered to issue negotiable evidences of debt on behalf of the Arkansas Earthquake Authority for the purposes of providing financing as set forth in subdivision (a)(9) of this section and for all other purposes consistent with and in furtherance of this chapter. (D) The term of the bonds may not exceed thirty (30) years. In addition, bonds may be issued for the purpose of refunding any bonds issued under this chapter. (E) Bonds issued by the Arkansas Earthquake Authority are: (i) Legal investments for all trust funds, the funds of all insurance companies, banks, trust companies, executors, administrators, trustees, and other fiduciaries; and (ii) Securities that may legally be deposited with and received by any state or municipal officer or agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now or may hereafter be authorized by law, including deposits to secure public funds. (F) The state pledges to and agrees with the holders of bonds that the state will not limit, alter, or restrict the rights vested in the Arkansas Earthquake Authority to fulfill each pledge of revenues and any other terms of any agreement made with or for the benefit of the holders of bonds or in any way impair the rights or remedies of the holders of the bonds. (G) Bonds issued by the Arkansas Earthquake Authority and the interest thereon shall at all times be exempt from all state, county, and municipal taxes. This exemption shall include income, inheritance, and estate taxes; (10) Pledge, assign, and grant a security interest in any of the assessments authorized by this chapter or other assets of the Arkansas Earthquake Authority in order to secure any notes, bonds, or other evidences of indebtedness of the Arkansas Earthquake Authority; (11) Enter into one (1) or more credit facilities, including, but not limited to, lines of credit, permitting the Arkansas Earthquake Authority to draw amounts as approved by the board, with payment, interest rate, indemnity, compensation, security, default, remedy, and other terms and conditions as approved by the board. All drawings under these credit facilities shall be available to finance the activities authorized by this chapter; and (12) Purchase reinsurance, hedge, securitize, or otherwise mitigate the risks insured or reinsured by the Arkansas Earthquake Authority by entering into such commitments and undertakings and exercising such powers as may be appropriate to accomplish the financings contemplated in this section and thereby carry out the purposes of this chapter. (b) In addition to the other powers granted by the Arkansas Insurance Code, the commissioner, after notice and hearing in accordance with the provisions of the Arkansas Insurance Code, may impose a monetary penalty upon any insurer or suspend or revoke the certificate of authority to transact insurance in the State of Arkansas of any insurer who fails to pay an assessment or otherwise file any report or furnish information required to be filed with the board pursuant to the board's direction that the board believes to be necessary in order for the board to perform its duties under this chapter.

Legislative History

Acts 1999, No. 1343, § 8.