§ 23-65-305 — Conditions of procurement

Arkansas § 23-65-305

• Jurisdiction: Arkansas
• Title: 23

Text

(a) If certain insurance coverages cannot be procured from authorized insurers, coverage designated "surplus lines" may be procured from unauthorized insurers subject to the following conditions: (1) The insurance shall be procured through a licensed surplus lines broker; (2) If this state is the home state of the insured: (A) The full amount of insurance required shall not be procurable, after diligent effort has been made, from among authorized insurers who are actually marketing that kind or class of insurance in this state; and (B) The amount of insurance placed in an unauthorized insurer is only the balance over the amount procurable from authorized insurers; and (3) The soliciting agent or broker shall maintain written documentation of compliance with the requirements of this section. (b) Surplus lines insurance may be placed by a surplus lines broker if the nonadmitted insurer: (1) Is authorized to write the type of insurance in its domiciliary jurisdiction; and (2) Meets the following criteria: (A) The nonadmitted insurer has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction that equals the greater of: (i) The minimum capital and surplus requirements under the laws of this state; or (ii) Fifteen million dollars ($15,000,000); and (B) The nonadmitted insurer is a nonadmitted insurer domiciled outside the United States that is listed on the Quarterly Listing of Alien Insurers as maintained by the International Insurers Department of the National Association of Insurance Commissioners. (c) (1) The requirements of subsection (b) of this section may be satisfied by a nonadmitted insurer possessing less than the minimum capital and surplus if the Insurance Commissioner makes an affirmative finding of acceptability. (2) The commissioner shall consider the following factors to determine a finding of acceptability for the requirements of subsection (b) of this section: (A) Quality of management; (B) Capital and surplus of a parent company; (C) Company underwriting profit and investment income trends; (D) Market availability; and (E) Company record and reputation within the industry. (3) The commissioner shall not make a finding of acceptability if the nonadmitted insurer's capital and surplus is less than four million five hundred thousand dollars ($4,500,000). (d) Subdivision (a)(2) of this section does not apply to a surplus lines broker seeking to procure or place nonadmitted insurance in this state for an exempt commercial purchaser if: (1) The surplus lines broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that the insurance may or may not be available from the admitted market that would provide greater protection with more regulatory oversight; and (2) The exempt commercial purchaser has subsequently requested in writing the surplus lines broker to procure or place the insurance from a nonadmitted insurer.

Legislative History

Acts 1959, No. 148, § 190; 1979, No. 731, § 1; A.S.A. 1947, § 66-2910; Acts 2001, No. 1555, § 3; 2011, No. 1055, § 2.