prop & cas ch 15. AR PC state laws

definitions

A domestic insurer is one formed under the laws of Arkansas. A foreign insurer means one formed under the laws of any jurisdiction other than Arkansas. An alien insurer means one formed under the laws of any country other than the United States, its states, districts, territories, and commonwealths. An authorized insurer means one duly authorized by a subsisting certificate of authority issued by the commissioner to transact insurance in Arkansas. An unauthorized insurer is one not authorized by a subsisting certificate of authority issued by the commissioner to transact insurance in Arkansas. Insurance transaction includes any: Solicitation Preliminary negotiations Execution of an insurance contract Transaction of matters arising out of the contract

CANCELLATION/NONREWAL

An automobile liability policy which has been in effect for 60 days may be cancelled for only one or more of the following reasons: Nonpayment of premium The named insured or any driver of the insured vehicle has been convicted of: Driving while intoxicated Homicide or assault arising out of the use of a motor vehicle Speeding or reckless driving at least 3 times during the policy period, or three months prior to the effective date of coverage Suspension or revocation of an insured's drivers license Fraud or misrepresentation of a material fact Nonpayment of membership dues Notice of cancellation must be provided to the named insured at least 20 days prior to the effective date of cancellation. Where cancellation is for nonpayment of premium, notice must be provided to the named insured at least 10 days prior to the effective date of cancellation. The notice of cancellation must be accompanied by the reason for cancellation. Notice of nonrenewal must be provided at least 30 days prior to the expiration of the policy's term. The reason for nonrenewal must either accompany the notice of nonrenewal, or be provided, at the request of the named insured, no less than 15 days prior to the effective date of nonrenewal.

maintaining a license

All insurance agents, brokers, consultants or adjuster licenses will continue in force unless non-renewed, expired, suspended, revoked, or terminated, but are subject at all times to annual payment to the Commissioner of the a continuation fee, accompanied by a written request for the continuation. A licensee who allows his/her license to lapse may reinstate the same license within 12 months after the due date of the renewal fee without the necessity of passing a written examination. However, a penalty in the amount of double the unpaid renewal fee will be required for any renewal fee received after the due date. Continuing Education Every 2 years (biennially), agents must complete 24 hours of continuing education courses in the line(s) for which they are licensed, 3 hours of which must be in ethics. For good cause, the Commissioner may grant an extension of up to 1 year to complete the continuing education requirements. A person teaching any approved course or program of instruction will be credited the same number of hours as a person taking and successfully completing the course. Subject to the Commissioner's approval, an agent/broker's active annual membership in local, regional, state, or national professional insurance organizations or associations may be approved for up to 2 annual hours of instruction. Educational requirements are obtained and reported annually to the commissioner on or before the birthdate of the licensee. Failure to report or obtain the mandated educational requirements along with the fee imposed in a timely manner will result in the additional following fines: If within 30 days after the due date, a fine of $25 will be imposed automatically If within 60 days after the due date, a fine of $50 will be imposed automatically If within 90 days after the due date, a fine of $100 will be imposed automatically If after 90 days from the due date, the license will become automatically suspended Reinstatement of the license requires payment of a fine of $150 if reinstated within 1 year from the due date of the education. If after 1 year from the due date, reinstatement is not available. Should a license be desired, the licensee must again proceed to become licensed as if never having held a license in addition to obtaining the education due when the license was suspended and paying the fine of $150. Exemption from Continuing Education Requirement The continuation education requirements do not apply to any of the following: Licensees for any kind of insurance for which an examination is not required. Any limited or restricted license the Insurance Commissioner may exempt Anyone who is at least 60 years of age Anyone who has held an active license as an agent, solicitor, consultant, or broker for a period of at least 15 consecutive years. Nonresident producers Licensed insurance consultants Any person called to active duty in any branch of the United States military services

producer appointment/ termination of contract

An insurance producer may not act as an agent of an insurer unless the producer becomes an appointed agent of that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become appointed. To appoint a producer as its agent, the appointing insurer must file a notice of appointment within 15 days after the date the agency contract is executed or the first insurance application is submitted. Upon receipt of the notice of appointment, the Commissioner must verify that the insurance producer is eligible for appointment within 30 days. Termination Each appointment will remain in effect until the agent's license terminates unless written notice of earlier termination of the appointment is filed with the Commissioner by the insurer or agent. Examination Any individual applying for an agent's license must be given an exam to determine whether he/she possesses the competence and knowledge of the kinds of insurance and transactions under the license for which he/she has applied. Combination License A licensed agent may also be licensed to act as a broker for insurers for which he/she is not currently licensed as agent. A licensed broker may be licensed as and be an agent as to insurers appointing him or her as agent. The sole relationship between a broker and an insurer as to which he/she is currently licensed as an agent, will be that of insurer and agent and not that of insurer and broker.

EMPLOYMENT

Any employment in the state in which 3 or more employees are regularly employed by the same employer in the course of business Any employment in which two or more employees are employed by any person engaged in building or building repair work Any employment in which one or more employees are employed by a contractor who subcontracts any part of his or her contract Any employment in which one or more employees are employed by a subcontractor *Employment does not include: A person working as a domestic servant in a private home A person employed to do gardening, maintenance, repair, remodeling, or similar work in or about the private residence of the person who hired them Agricultural farm labor Employment by The State of Arkansas and each of the political subdivisions A person for whom a rule of liability for injury or death arising out of and in the course of employment is provided by the laws of the United States (such as The Jones act) A person performing services for any nonprofit religious, charitable, or relief organization. Any person engaged in the vending, selling, or delivery directly to the general public of any newspapers, magazines, or periodicals or any person acting as sales agent or distributor as an independent contractor of or for any newspaper, magazine, or periodical

EMPLOYEE

Any person, including a minor, employed in the service of an employer under any contract of hire or apprenticeship, except for casual employment not in the course of the trade, business, profession, or occupation. Employee does not include any individual who is both a licensee and a qualified real estate agent.

qualifications

Anyone at least 18 years of age who wants to transact business as an insurance agent must submit a license application to the Commissioner of Insurance. The applicant must also: Pay appropriate nonrefundable application fee Pass a 20-hour prelicensing course for each class of insurance he/she wishes to transact Pass a licensing examination for each class of insurance he/she wishes to transact Business Entities Any business entity that acts as an insurance agent, and holds a direct agency appointment from an insurance company, must obtain an insurance agent license. Business entities must identify a licensed agent as a compliance officer who will be responsible for the business entity's compliance with the insurance laws, rules and regulations of Arkansas. The business entity must ensure that each officer, director, partner, and employee of the business entity who acts as an insurance agent is licensed as an insurance agent, and disclose this information to the Department. Lines of Authority Any person who meets the requirements will be issued an insurance agent license. The lines of authority are: Life Accident and health or sickness Casualty Property Variable life and variable annuity products Personal lines Credit Unless suspended, revoked, or refused renewal, an insurance agent license remains in effect as long as education requirements for resident individual agents are met and the requires fee is paid by such insurance agent's due date.

the insurance commissioner

Appointment The Commissioner of Insurance is appointed by the Governor with the advice and consent of the Senate. At the time of taking office, the Commissioner must execute a $50,000 bond to the State of Arkansas for the faithful performance of his/her duties. General Duties and Powers The Commissioner of Insurance has general supervision, control and regulation of persons and companies authorized to transact the business of insurance in Arkansas. He/she has the authority to make any rules necessary to enforce the insurance laws of Arkansas. The Commissioner regulates premium rates, policy forms, insurer solvency and receiverships, as well as other matters relating to the regulation of insurance. The Commissioner also issues the proper insurance license for agents, brokers and Certificates of Authority for the insurers who qualify to conduct business in the state of Arkansas. The Commissioner may conduct insurer and agency audits, examinations, and investigations and enforce any provision of the Insurance Code.

HOMEOWNERS COVERAGE

Cancellation/Renewal/Nonrenewal After having been in force over 60 days, property and casualty policies may be cancelled only for one of the following reasons: Nonpayment of premium Fraud or material misrepresentation in obtaining the policy, continuing the policy, or in presenting a claim under the policy The occurrence of a material change in the risk that substantially increases any hazard after policy issuance Violation of any local fire, health, safety, building, or construction regulation or ordinances with respect to any insured property Nonpayment of membership dues A material violation of a material provision of the policy Cancellation is effective when notice of cancellation has been provided by the insurer to the named insured and to any lien holder at least 20 days prior to the effective date of cancellation. Where cancellation is for nonpayment of premium, notice of cancellation must be provided at least 10 days prior to the effective date of cancellation. In the event of nonrenewal, the insurer must give 30 days advance notice to the insured. Farmowners Policy A Farmowners Policy is a packaged policy (similar to a Homeowners Policy) that puts Farm Property Coverage and Farm Liability Coverage together as one policy offered by some insurers.

DEFINITIONS

Compensable Injury An accidental injury causing physical harm to the body or to prosthetic appliances, including eyeglasses, contact lenses, or hearing aids, arising out of and in the course of employment and which requires medical services or results in disability or death An injury causing physical harm to the body and arising out of and in the course of employment if it is not caused by a specific incident or is not identifiable by time and place of occurrence (occupational disease) Mental illness Heart or cardiovascular injury, accident, or disease Hernia An adverse reaction experienced by any employee of the Department of Health or any employee of a hospital licensed by the Department of Health related to vaccination for smallpox, including the Dryvax vaccine Compensable injury does not include: Injury to any participant in assaults which are the result of non-employment-related hostility, or injuries caused by horseplay Injury incurred while engaging in any recreational or social activities for the employee's personal pleasure Injury at a time when employment services were not being performed or before the employee was hired or after the employment relationship was terminated Injury due to the use of alcohol, illegal drugs, or prescription drugs not used in conjunction with physician's orders

UNINSURED/UNDERINSURED MOTORIST (UM/UMI)

Every auto liability insurer must offer UM/UIM coverage with every policy. The UM/UIM limits may be no less than the bodily injury or death limits of the liability portion of the policy. The insured may reject the UM/UIM coverage in writing. The rejection will automatically continue until withdrawn in writing. Every insured purchasing uninsured motorist bodily injury coverage must be provided an opportunity to include uninsured motorist property damage coverage applicable to losses in excess of $200.

MEDICAL PAYMENTS

Every automobile liability insurance policy covering any private passenger motor vehicle must provide the following minimum benefits for medical and hospital, income disability, and accidental death: Medical, hospital, nursing, dental, surgical, ambulance, funeral expenses, and prosthetic services incurred within 24 months after the automobile accident, up to an aggregate of $5,000 per person 70% of the loss of income from work during a period commencing 8 days after the date of the accident, and not to exceed 52 weeks, but subject to a maximum of $140 ($70 for a non-income earner) per week $5,000 to be paid to the personal representative of the insured, if injury, sickness, or disease resulting from an automobile accident causes death within one year from the date of the accident

PRODUCER RESPONSIBILITIES

Fiduciary Capacity All funds, fees or premiums received by a licensee are trust funds for which the licensee is accountable to the insured, insurer or any other person so entitled. Any licensee who diverts or appropriates trust funds to his/her own use will be guilty of theft of property and be punished as provided by law. Commissions An insurer or producer may not pay a commission, service fee, brokerage, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in Arkansas if that person is required to be licensed and is not so licensed. No person may accept a commission, service fee, brokerage, or other valuable consideration for selling, soliciting or negotiating insurance in Arkansas if that person is required to be licensed and is not so licensed. Renewal or other deferred commissions may be paid to a person for selling, soliciting, or negotiating insurance in Arkansas if such person was licensed when the sale, solicitation, or negotiation of insurance occurred. Any insurance agent may pay or assign a commission, service fee, brokerage, or any other valuable consideration to an insurance agency or any financial holding company which does not sell, solicit or negotiate insurance in Arkansas unless such payment or assignment violates a state provision. Fraud Reporting Any producer who has reason to know that an insurer is not licensed must report the insurer to the Department. Any producer who knows or has reason to know that a health plan is not licensed in accordance with the Arkansas Insurance Code shall immediately report the health plan to the Insurance Department.

COMPARATIVE FAULT

In all actions for damages predicated upon fault, liability is determined by comparing the fault of the claimant with the fault of the party from whom the claimant seeks to recover damages. If the fault chargeable to a claimant is of a lesser degree than the fault chargeable to the party from whom the claimant seeks to recover damages, then the claimant is entitled to recover damages a decreased in proportion to the degree of his/her own fault. If the fault chargeable to a claimant is equal to or greater than any fault chargeable to the party from whom the claimant seeks to recover damages, then the claimant is not entitled to recover damages. The word "fault" includes any act, omission, conduct, risk assumed, breach of warranty, or breach of any legal duty which is a proximate cause of any damage sustained by any party. Commercial Liability Any policy providing an aggregate limit of liability within the schedule of limits must include a notice specifying that the policy limit is an "aggregate." The aggregate limit provision must be clearly defined within the policy. Policies containing provisions which would reduce the limit of liability available for judgments or settlements by the amount of payment made for defense cost or claim expenses shall not be approved by the Commissioner unless a separate limit for defense costs equal to 100% of the annual aggregate limit of liability stated in the policy for judgments or settlements is offered for defense costs or claims expenses to the insured. However, no policy covering automobile liability insurance may contain the defense within the limits concept. Nonrenewal Except in the case of nonpayment of premium, an insurer must renew a policy unless a written notice of nonrenewal is mailed at least 60 days prior to the expiration date or anniversary date.

RENEWAL, SUSPENSION OR REVOCATION CONTINUED

License Restoration or Reissue The Commissioner may not again issue a license under the Arkansas Insurance Code to any person whose license has been revoked until after 3 years and not until: The person has paid in full any fines or penalties imposed at the time of revocation The person has paid restitution of actual losses to affected persons The person again qualifies for license in accordance with the applicable provisions of the Arkansas Insurance Code If a business has its license suspended or revoked, no member, partner or employee shall be licensed or be designated in any license during the suspension/revocation period unless the Commissioner determines that such person was not personally at fault and did not acquiesce in the matter which resulted in the license suspension/revocation. Return of License to Commissioner All licenses are the property of the State of Arkansas. Upon any expiration, termination, suspension, or revocation of the license, the licensee must immediately return it to the Commissioner. For any license lost, stolen, or destroyed, the Commissioner may accept the affidavit of the licensee or concerning the facts of the loss, theft, or destruction. Any licensee who ceases to maintain residence in this state must deliver his/her insurance license to the Commissioner within 10 days after terminating residency. Hearings Whenever the Insurance Commissioner has reason to believe that any person has engaged in any unfair method of competition or any unfair or deceptive act or practice, he/she may issue a statement of the charges and notice of a hearing to be held at least 10 days after the date of notice. At the hearing, the person will have an opportunity to be heard and to show cause why a cease and desist order should not be made by the commissioner. Upon the hearing, the commissioner: May administer oaths, examine and cross-examine witnesses, and receive oral and documentary evidence Will have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence, or other documents that the commissioner deems relevant to the inquiry

MARINE INSURANCE

Marine insurance includes: Property Insurance against loss or damage to: -Vessels, craft, aircraft, cars, automobiles and vehicles of every kind -Goods, freights, cargoes, merchandise and effects -Disbursements, profits, moneys, bullion, precious stones, securities, evidences of debt, and valuable papers -Other kinds of property in connection with any and all risks or perils of navigation, transit, or transportation. Person or property in connection with marine, inland marine, transit, or transportation insurance including liability for, loss of or damage Bridges, tunnels, and other instrumentalities of transportation and communication Piers, wharves, docks and ships Other aids to navigation and transportation, including dry docks and marine railways "Marine protection and indemnity insurance," meaning insurance against loss, damage, expense, or legal liability arising out of the ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft, or instrumentality in use in ocean or inland waterways including liability of the insured for personal injury, illness, or death or for loss of or damage to the property of another person Valued Policy Law In case of a total loss by fire or natural disaster of the property insured, a property insurance policy (other than for flood and earthquake) shall be held and considered to be a liquidated demand against the company taking the risk for the full amount stated in the policy, or the full amount upon which the company charges, collects, or receives a premium. The valued policy law does not apply to personal property or detached or appurtenant structures.

UNAUTHORIZED TANSACTIONS

No person or entity may act as agent or broker in the solicitation, negotiation, or effectuation of insurance, inspection of risks, fixing of rates, investigation or adjustment of losses, collection of premiums, or in any other manner if that person or entity is not authorized or licensed by the State Insurance Department. No person or entity may act as a producer, adjuster, or consultant without first obtaining appropriate licensure or registration as required by Arkansas insurance law.

CHANGE OF ADDRESS

Producers must promptly notify the Commissioner in writing of any change of address within 10 days of that change of address. Place of Business/Maintenance Every resident agent or resident broker shall have a place of business in Arkansas or in a city whose border passes through Arkansas that is accessible to the public and where the licensee principally conducts transactions under his/her license. The agent/broker license shall be conspicuously displayed. The agent/broker must keep all records pertaining to transactions under his/her license for at least: 5 years from the date the record was created; or 1 year following the final settlement or final adjudication of a criminal proceeding, civil litigation, or an administrative proceeding

FINANCIAL RESPONSIBILITY/PROOF OF INSURANCE

No vehicle will be, or continue to be, registered in the name of any person required to file proof of financial responsibility for the future unless such proof is furnished for the vehicle. Proof of financial responsibility may be given by filing one of the following: -A certificate of insurance -A bond -A certificate of deposit of money or securities -A certificate of self-insurance If a bond is filed as proof of financial responsibility, it must provide the minimum financial requirements established by law (25/50/25).

EARTHQUAKE AND DEDUCTIBLE

Notice and Declination Existing Policyholders Insurers writing homeowner, farmowner, fire and allied lines (excluding commercial policies and crop hail), must notify policyholders who do not maintain residential earthquake insurance or who maintain residential earthquake insurance at amounts less than 100% of the insured value of the dwelling, of their potential eligibility for residential earthquake insurance through the Market Assistance Program or the Arkansas Earthquake Authority. The notice must be provided a minimum of 3 different times over a 4-year interval. This notice from insurers must provide earthquake coverage to existing policyholders who do not maintain a policy of residential earthquake insurance, nor will the notice increase the amounts of earthquake insurance for those policyholders who maintain coverage at less than 100% of the insured value of the dwelling. New Policyholders Insurers must advise new applicants for these types of coverage of the availability of residential earthquake insurance through the program or the authority, if coverage is unavailable from the insurer. At the time of application, if an applicant chooses not to purchase residential earthquake coverage through an insurer, including program participants or the authority, the applicant must reject this coverage in writing on the application. Insurers must maintain the application containing the rejection as part of the insurers' files.

licensing

Persons Required to Be Licensed Producer A producer is a person or business entity who solicits, negotiates, effects, procures, delivers, renews, continues, or binds an insurance policy (including annuities) for risks residing, located, or to be performed in Arkansas. Adjuster An adjuster is a person or business entity who investigates and negotiates, on behalf of the insurer, settlement of claims arising under insurance contracts. The adjuster evaluates the merits of a claim and determines the insurance proceeds that might be payable. Consultant A Consultant is an individual, firm, limited liability company, or corporation which, for a fee, advises or counsels anyone as to his/her insurance needs under any insurance policy or contract. "Consultant" does not include licensed attorneys, actuaries, certified public accountants, medical bill analysts, or any other person who gives or offers incidental advice to the public in the normal course of normal business activity other than insurance consulting. Resident/Nonresident A resident producer is one whose residence is in Arkansas, or who may vote in Arkansas, who is licensed as a resident insurance producer by the commissioner. A nonresident producer is one licensed in and a resident of another state. The agent must make application and be in good standing in their home state and their home state must award nonresident agent licenses to residents of Arkansas on the same basis. Temporary License The Commissioner of Insurance may issue a temporary insurance agent license for a period not exceeding 180 days, without requiring an examination, in the following circumstances: The surviving spouse or court-appointed personal representative of a licensed insurance agent who dies or becomes mentally or physically disabled, while new agents are being trained as a replacement, the business is being sold, or until a disabled agent can return to the business Any member or employee of a business entity licensed as an insurance agent, upon the death or disability of an individual, designated in such business entity's application or the insurance agent's license The designee of a licensee who is entering active service in the armed forces of the United States Any other person deemed necessary by the Commissioner

EMPLOYERS LIABILITY AND WORKERS COMPENSATION

Purpose The primary purposes of Workers' Compensation laws are to: Pay temporary and permanent disability benefits to all legitimately injured workers that suffer an injury or disease arising out of and in the course of their employment Pay reasonable and necessary medical expenses and then to return the worker to the workforce Improve workplace safety through safety programs Improve health care delivery through use of managed care concepts Encourage injured workers to return to work Deter and punish frauds Curtail the rise in medical costs

AUTOMOBILE INSURANCE

Required Coverage/Liability Limits It is unlawful for any person to operate a motor vehicle within Arkansas unless the person and the vehicle are covered by a certificate of self-insurance or an insurance policy. Failure to present proof of insurance coverage at the time of arrest and a failure of the vehicle insurance database to show current insurance coverage at the time of a traffic stop creates a presumption that the person, motor vehicle, or both are uninsured. The required auto liability insurance limits in Arkansas are 25/50/25: --$25,000 per person in any one accident for bodily injury --$50,000 per occurrence for two or more persons in any one accident for bodily injury --$25,000 per occurrence for property damage

PROPERTY AND CASUALTY LAWS

State-Specific Definitions Surplus Lines Any person, while licensed as a resident property or casualty insurance producer, may be licensed as a surplus lines broker if: He/she has held the license in this or another state, or both, for three years prior to application for a surplus lines broker's license He/she is deemed by the Insurance Commissioner to be competent and trustworthy He/she must post $50,000 in securities with the Commissioner as a condition of licensure A licensed surplus lines broker may accept and place surplus lines business for any insurance agent or broker licensed in this state for the kind and class of insurance involved. Property Insurance Property Insurance - Insurance on real or personal property, whether on land, water, or in the air, against loss or damage from any and all hazard or cause and against loss consequential upon the loss or damage, other than non-contractual legal liability for the loss or damage. Casualty Insurance Casualty Insurance includes the liability portion of the following lines of insurance: Vehicle insurance Liability insurance Workers' Compensation and Employer's Liability Burglary and theft Personal property floater Glass Boiler and machinery Leakage and fire extinguishing equipment Credit Malpractice Livestock. Entertainments Elevator Insurance Abstractor's professional liability Insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within any other kind of insurance as defined in the Insurance Code

COVERAGE/BENEFITS

Temporary Total Disability For temporary total disability, the benefit amount is 66 2/3% of the employee's weekly wages The temporary total disability benefit must be at least $20 per week and must not exceed 70% of the state's average weekly wage Permanent Total Disability For permanent total disability, the benefit amount is 66-2/3% of the employee's weekly wages, up to the 85% of the state average weekly wage. The minimum payment is $20 per week. For example, if 66-2/3% of an employee's weekly wage is $900, but 85% of the state average weekly wage is $850, the employee will receive the $850, not the $900. Permanent Partial Disability The permanent partial disability rate for compensation payable to an employee for permanent partial disability may not exceed 66 2/3% of the employee's average weekly wage, with a $20 per week minimum, subject to a maximum of $154. However, if the employee's total disability rate for the injury would be $205.35 per week or greater, then the maximum permanent partial disability rate shall be 75% of the employee's total disability rate. Compensation is not paid during the first 7 days of disability. If the disability goes beyond that time, compensation will begin on the 9th day. If the disability extends for 2 consecutive weeks, compensation will begin on the first day of disability, excluding the day of injury. Coverage is not provided if the employee's injury results from his/her deliberate intention to cause an injury, or willful failure to use protection against an accident required by statute and provided for the employee. An employer is not liable where the injury, disability or death was contributed to by the employee's use or consumption of alcohol or any drugs, chemicals or any other compounds or substances.

ARKANSAS AUTOMOBILE INSURANCE PLAN

The Automobile Insurance Plan is available for individuals who have been unable to obtain auto insurance through normal markets. Policies are issued with limits necessary to meet the financial responsibility requirements of the state. When an automobile liability insurance policy has been cancelled or nonrenewed by an insurer for a reason other than nonpayment of premium, the notice must include a statement informing the insured of the availability of the Automobile Assigned Risk Plan. The Commissioner may also require the insurance companies to provide applicants with additional coverage for medical benefits up to $500. All insurance companies writing automobile liability insurance must participate in the Plan.

hearings/notice of hearings/orders

The Commissioner may hold a hearing for any purpose within the scope of the Insurance Code. The Commissioner must hold a hearing within 30 days of its request and must give a notice of the date, time, and location of the hearing 10 days in advance. The Commissioner must make an order on the hearing within 30 days after it concludes. Any person who is aggrieved by an order of the Commissioner may appeal such order. The appeal must take place within 30 days after the notice of appeal has been received by the Commissioner. Penalties Unless a greater penalty is provided by another law of Arkansas, any person who violates any provision of the Insurance Code is subject to one or more of the following: Refusal, suspension or revocation of license or Certificate of Authority A fine of up to $1,000 for each violation Order for restitution of actual losses to affected persons

RENEWAL, SUSPENSION OR REVOCATION OF LICENSE

The Commissioner may suspend, revoke or refuse renewal of any license issued for any one of the following causes: The licensee provided incorrect, incomplete or materially untrue information in the license application The licensee has violated any insurance law, regulation, subpoena or order of the Commissioner, or of another state's insurance commissioner The license was obtained through fraud or misrepresentation The licensee improperly withheld, misappropriated or converted any monies or properties received in the course of doing business The licensee misrepresented the provisions, terms and conditions of an insurance policy The licensee has been convicted of a misdemeanor or felony The licensee admitted to or was found to have committed any insurance unfair trade practice The licensee had an insurance agent license denial, suspension or revocation in any other state The licensee forged another person's name in an application or document related to insurance The licensee improperly used notes or reference material to complete an examination The licensee knowingly accepts business from a producer who is not licensed The licensee failed to comply with any order imposing a child support obligation on him/her The licensee failed to pay state income tax or an order directing payment of such tax The licensee intentionally omitted material facts during the presentation of an insurance policy The licensee made misleading representations or incomplete policy comparisons in order to induce someone to surrender an existing policy The licensee violated any subpoena or order of the Commissioner or of the regulatory official of insurance in another state The licensee has used fraudulent, coercive, or dishonest practices or demonstrated incompetence, untrustworthiness, lack of good personal or business reputation, or financial irresponsibility The licensee has failed to provide a written response after receipt of a written inquiry from the Commissioner within 30 days after receipt thereof In addition to or in lieu of revocation or suspension the Commissioner may discipline with one of the following. Order payment of an administrative penalty of up to $1,000 per violation or up to $5,000 for the same violation if the person should have known that his/her actions could result in license suspension or revocation Order restitution of actual losses to affected persons The Commissioner may suspend or revoke the license of an insurance agent who places excess lines risks without first obtaining an excess lines license. The Insurance Commissioner may suspend a license for up to 3 years. Upon the suspension or revocation of a license, the Commissioner shall immediately notify the licensee and the insurers he/she represents. The insurer(s) shall retrieve all solicitation materials, policy applications, binders, and all other materials that are the insurer's property.

examination of records

The Commissioner of Insurance may examine the transactions, accounts and records of each insurer as often as he/she feels is necessary, and no less often than at least once every 5 years. The Commissioner must also examine each insurer applying for a Certificate of Authority to transact insurance business in Arkansas. The Commissioner has the authority to examine or investigate any person necessary or material to the examination of an insurer. The Commissioner may subpoena witnesses, administer oaths and require the disclosure of books and records with respect to an examination. In lieu of making his/her own examination of any foreign or alien insurer authorized in Arkansas, the Commissioner may accept a full report of the most recent examination of a foreign or alien insurer as prepared by its state of domicile's insurance department. Self Incrimination Any person who asks to be excused from attending, testifying, or producing any documents in connection with any examination on the ground that the testimony or evidence required may tend to incriminate him/her must give the testimony or produce the evidence, but will be granted immunity for any penalty or forfeiture because of the testimony or evidence he/she provides. However, the person is not exempt from prosecution or punishment for any perjury committed, and his/her license may still be suspended or revoked.

CEASE AND DESIST ORDERS

The Insurance Commissioner may order a person or entity to cease and desist from an act or practice when the Commissioner has reason to believe that the person or entity has not complied with the requirements of this section or any other provision of the Arkansas Insurance Code. Upon the entry of the cease and desist order, the Commissioner must promptly notify the person or entity named that the order has been entered, the reasons for the order, and that the person or entity has the right to a hearing on the order. A hearing may be held on the written request of the person or entity named in the order if the Commissioner receives the request within 30 days of the entry of the order. The person or entity named in the cease and desist order will have the burden of proving that the actions, methods, or practices described in the order are not in violation of the Arkansas Insurance Code Any insurance producer licensed in Arkansas, or any other person, who knowingly sells, solicits, or negotiates a product of an unauthorized entity in violation of the law will be guilty of a Class D felony, and may be personally liable for damages caused by the unauthorized person or entity, including claims unpaid by the unauthorized person or entity. Any person or entity who fails to comply with a cease and desist order may be subject to one or more of the following: A monetary penalty of not more than $10,000 Suspension or revocation of the person's or entity's license or registration Injunctive relief

UNFAIR METHODS OF COMPETITION

The following acts are defined by statute as unfair methods of competition and unfair or deceptive acts or practices: Rebating - Offering any rebate of premiums payable, any special favor in dividends or other benefits, or any valuable consideration or inducement not specified in the policy. Misrepresentation - Making, issuing or circulating any statement that misrepresents the benefits, advantages, conditions or terms of any insurance policy. This includes: Misrepresenting the dividends or share of the surplus to be received on any insurance policy Using any name or title that misrepresents the policy's true nature. For example, representing a standard whole life policy as a "savings plan." Misrepresentation for the purpose of effectuating a pledge or effecting a loan against any insurance policy Misrepresenting any insurance policy as being shares of stock False Advertising - Publishing or disseminating in any fashion, or through any media, any untrue, deceptive, or misleading statement about the business of insurance or, with respect to any person, in the conduct of such person's insurance business. This includes knowingly making any false entry of a material fact or knowingly omitting a true entry of any material fact with the intent to deceive. Defamation - Making any false or maliciously critical statement regarding the financial condition of any person, with the intent to injure such person. False Financial Statements - Making any false or misleading statements to the dividends or share of surplus previously paid on any insurance policy. Boycott, Coercion, Intimidation - Entering into action resulting in an unreasonable restraint of, or monopoly in, the business of insurance. Unfair Discrimination - Permitting individuals of the same class and equal life expectancy to be charged different rates for life insurance or annuities. Unfair discrimination includes: Permitting individuals of the same class and essentially the same hazard to be charged different rates for accident or health insurance Refusing to insure or charging a different rate to an individual based solely on blindness or partial blindness Refusing to insure or charging a different rate for life or health insurance to an individual who is, has been, or may be a victim of domestic abuse Twisting - Misrepresenting for the purpose of inducing or tending to induce the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy.

exemptions/ exceptions

The licensing examination is not required for nonresident agents or brokers, or for any of the following types of insurance: Transportation Credit Funeral Mortgagor's decreasing term life or disability insurance to debtors

RURAL RISK UNDERWRITING ASSOCIATION

The purpose of the Arkansas Rural Risk Underwriting Association is to provide a mandatory plan to assure an adequate market for property insurance on insurable risks in the rural areas of Arkansas. Any applicant that meets the Association's underwriting standards will be considered an insurable risk and entitled to property insurance through the Association. All insurers licensed to transact property insurance (including farmers' mutual aid associations) are required to become members of the Arkansas Rural Risk Underwriting Association. A member's participation in the Association's expenses, profits, and losses is determined by the proportion that the member's direct property insurance premiums bears to the aggregate net direct property insurance premiums of all members of the Association for the same period. The governing board consists of 7 members to appointed by the Insurance Commissioner, which meet at least once annually to review and prescribe operating rules. The governing board is empowered to make necessary assessments to provide funds needed to make payment of the Association's loss claims and expenses, up to 2% of each insurer's net direct written premium for the preceding calendar year. The plan provides for an annual credit to members for basic property insurance voluntarily written on rural risks. This credit relieves a member wholly or partially from participation in the Association's expenses and losses.

AR PROPERTY AND CASUALTY INS GUARANTY ASSOCIATION

The purpose of the Guaranty Association is to establish a method to pay unpaid claims resulting from the insolvency of a member insurer. All property and casualty insurers that are admitted to transact insurance in Arkansas are required to be member insurers of the Association. Member insurers are assessed the amounts necessary to administer the program and pay covered claims. The Association will cover claims existing prior to the determination of insolvency or arising within 30 days after the determination of insolvency. The maximum amount the guaranty association will pay for a covered claim is $300,000. It will also cover up to $25,000 per policy for the return of unearned premiums. The Arkansas Property and Casualty Advisory Association is comprised of 8 insurers appointed by the Commissioner, who are tasked to provide fair representation for insures in matters concerning premium income, geographic location and segments of the industry represented in Arkansas. Covered claims do not include the following: Claims by a third-party liability claimant whose net worth exceeds $50 million in the year preceding the date the insurer becomes insolvent Any amount awarded as punitive or exemplary damages Any amount due to any reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries Supplementary payment obligation such as adjustment fees and expenses, attorney's fees and expenses, court costs, interest, and bond premiums incurred prior to the determination of an insurer's insolvency

MARKETING PRACTICES

Unfair Claim Practices The following are considered acts constituting improper claim settlement practices: Misrepresenting to claimants pertinent facts or provisions in the insurance policy that relate to any coverage at issue Failing to promptly acknowledge communications pertinent to a claim Failing to use reasonable standards in the prompt investigation of claims Failing to attempt to promptly and fairly settle claims in which liability is clear Compelling an insured to file suit by offering substantially less than what a lawsuit would award Refusing to pay claims without conducting a reasonable investigation Failing to affirm or deny coverage on a claim within a reasonable time after receiving a proof of loss Attempting to settle a claim for less than the amount to which the claimant believed he/she was entitled by reference to written or printed advertising material accompanying the application Attempting to settle a claim based on an application that was altered by the agent or company without notice to, or consent of, the insured Making claim payments that are not accompanied by statements indicating the coverage under which payments are being made Delaying the investigation or payment of a claim by requiring the claimant to submit both a formal proof of loss form and subsequent verification when both submissions contain the same information Failing to promptly explain the denial of a claim or an offer of compromise in relation to the facts and applicable law Making known to claimants a policy of appealing arbitration awards that favor claimants, for the purpose of compelling them to accept a lesser settlement than that awarded Failing to promptly settle claims (where liability is clear) under one section of the policy coverage in order to influence settlements under other sections Failing to acknowledge and act promptly upon communications regarding claims Upon receiving notification of a claim, every insurer must acknowledge the receipt of such notice within 15 working days. An insurer must advise the claimant of the acceptance or denial of the claim within 15 working days after receipt of proofs of loss. Every insurer must complete investigation of a claim within 45 days of notification, unless the investigation cannot reasonably be completed within such time. If an investigation cannot be completed within the 45-day time period, insurers must notify claimants that additional time is required and include the reasons for the delay

NOTICE OF INJURY OR DEATH

Unless an injury either renders the employee physically or mentally unable to do so, or the injury/death is made known to the employer immediately after it occurs, the employee must report the injury to the employer. The employer will not be responsible for disability, medical, or other benefits prior to receiving the employee's report of the injury. All reporting procedures must be reasonable and all employees must be notified about them. Notification requirements do not apply when an employee requires emergency medical treatment outside the employer's normal business hours. However, the employee must notify the employer on the next regular business day. Failure to give the notice will not bar any claim if: The employer had knowledge of the injury or death The employee had no knowledge that the condition or disease arose out of and in the course of the employment The Commission excuses the failure on the grounds that for some satisfactory reason the notice could not be given Medical Benefits Employers must promptly provide for an injured employee any medical, surgical, hospital, chiropractic, optometric, podiatric, and nursing services, as well as any medicine, crutches, ambulatory devices, artificial limbs, eyeglasses, contact lenses, hearing aids, and other apparatus as may be reasonably necessary in connection with the injury received by the employee. If the employer fails to provide medical services within a reasonable time after knowledge of the injury, the Workers' Compensation Commission may direct that the injured employee obtain the medical service at the expense of the employer, and any emergency treatment afforded the injured employee be at the expense of the employer. In no circumstance may an employee, his or her family, or dependents, be billed or charged for any portion of the cost of providing the benefits to which he/she is entitled by law. Waiver of Exclusion or Exemption Any employer having any exempted or excepted employment may at any time waive the exemptions or exceptions for any or all employees engaged in such employment. Every employer who waives the exclusion or exemption must post typewritten or printed notice informing the employees of the waiver. Notice must be given at least 30 days prior to any injury. However, if the injury occurs less than 30 days after the date of employment, any notice given at the time of employment will be sufficient.