Table Of Content

' Arkansas C OF 1987 Annotated SUPPLEMEN'i 2013 VOLUME 24B Place beside Voiunie 24B, epared i)y lac hiUi'HinL ^jdi/^ Under the Direction and Sup< ARKANSAS CODE REVISI^ Senator David Joh '-. Senator Da\ epresentativ; "~ presentative Honorable Betti Honorable D( Honorable I) le Stacv LcM^ds / i H. ISchwartz, iJi't fjftle Rock, Sch^ : (eadnour, iller, Assisi ^ TITLE 23 PUBLIC UTILITIES AND REGULATED INDUSTRIES (CHAPTERS 1-29 IN VOLUME 22; CHAPTERS 30-59 IN VOLUME 23A; CHAPTERS 60-73 IN VOLUME 23B; CHAPTERS 74-87 IN VOLUME 24A) SUBTITLE INSURANCE 3. CHAPTER. PROPERTY INSURANCE. 88. 89. CASUALTY INSURANCE. 91. PREPAID LEGAL INSURANCE. 92. MULTIPLE EMPLOYER TRUSTSAND SELF-INSURED PLANS. 93. CONTINUING CARE PROVIDERS. 95. RISK-SHARING PLANS FOR PROPERTYAND CASUALTY INSURANCE. 96. ARKANSAS LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION ACT LONG-TERM CARE INSURANCE. 97. 99. HEALTH CARE PROVIDERS. 100. STATE INSURANCE DEPARTMENTCRIMINALINVESTIGATIONDIVISION TRUST FUND ACT. 102. ARKANSAS EARTHQUAKE AUTHORITYACT. 103. TITLE INSURANCE. SUBTITLE MISCELLANEOUS REGULATED INDUSTRIES 4. CHAPTER. 110. ARKANSAS HORSE RACING LAW. 111. ARKANSAS GREYHOUND RACING LAW. 112. ARKANSAS MOTOR VEHICLE COMMISSIONACT. 113. LOCAL OPTION HORSE RACING AND GREYHOUND RACING ELEC- TRONIC GAMES OF SKILLACT. 114. CHARITABLE BINGO AND RAFFLES. 115. ARKANSAS SCHOLARSHIP LOTTERYACT. SUBTITLE INSURANCE 3. CHAPTER 88 PROPERTY INSURANCE subchapter. 1. General Provisions. 3. Rural Risk Underwriting. 5. Portable Electronics Insurance. 1 23-88-101 PUBLIC UTILITIESAND REGULATED INDUSTRIES 2 — Subchapter 1 General Provisions SECTION. 23-88-102. Paying costs ofvolunteer fire department services. 23-88-101. Valued policy law. RESEARCH REFERENCES ALR. Applicability of Valued-Policy Statutes to Flood, Wind, and Hurricane Damage. 62 A.L.R.Gth 227. 23-88-102. Paying costs of volunteer fire department services. (a) The amount charged by avolunteerfire department forthe cost of its services in responding to a fire on or an emergency call concerning the property of a nonmember within its district shall not exceed an amount equal to the fair market value of the service rendered, except that a claim for services in responding to a fire involving only personal property shall be allowed only for personal property of nonmembers, and the claimed amount shall not exceed five hundred dollars ($500). (b)(1) When a volunteer fire department responds to a fire occurring or responds to a 911 or other fire emergency call within its district and the property that is the subject ofthe alarm is owned by a nonmember and insured in case ofany damage resulting from a fire, the insurance company insuring the property against loss shall pay to the volunteer fire department the fair market value ofits services from the insurance proceeds. (2) Notice to both the insurance company and to the insured nonmember by the volunteer fire department for its costs ofservices shall be by certified mail within thirty (30) days after the date ofthe services rendered. (c)(1)(A) In the event a nonmember desires to contest an assessment, the nonmember may notify the fire department board of his or her objection to the assessment, and the fire department board shall file a civil suit in the nearest district court within ten (10) days askingfor the amount claimed by the fire department. (B) The district court shall give a hearing on the matterwithin ten (10) days to determine ifthe amount claimed is fair compensation for the services rendered. (2) Ifthe amount ofthe assessment is contested in district court, the fire department shall immediately notify the insurer of the nonmember's property by certified mail, and the insurer shall upon notification pay into the registry of the court an amount equal to the assessment made by the volunteer fire department for fire services. (d) The insurer shall not be liable for any amount of money that exceeds the face amount ofthe policy unless the provisions ofthe policy provide otherwise. 3 PROPERTY INSURANCE 23-88-303 History. Acts 1987, No. 836, § 2; 1991, No. 984, §§ 1, 2; 1997, No. 1150, § 5; 2007, No. 581, § 2. — Subchapter 3 Rural Risk Underwriting SECTION. SECTION. 23-88-303. Arkansas Rural Risk Under—- 23-88-306. Provisions ofplan, writing Association Plan of property insurance. Effective Dates. Acts 2005, No. 2004, Acts 2007, No. 588, § 2: Mar. 28, 2007. § 6: Apr. 11, 2005. Emergency clause pro- Emergency clause provided: "It is found vided: "It is found and determined by the and determined by the GeneralAssembly General Assembly ofthe State ofArkan- oftheStateofArkansas thatfire is one (1) sas that the laws ofthis state as to regu- ofthe leading causes ofloss in the state; lation offarmers' mutual aid associations that funding is essential to combat these or companies are inadequate for the pro- losses; andthatthe annual assessmenton tection of the public and that this act is rural risk underwriters which provided immediatelynecessaryin orderto provide reimbursement for the mailing offire de- partmentrenewal subscriptionnotices ex- for the adequate protection ofthe public. piredonDecember31, 2006.Therefore, an Therefore, an emergency is declared to emergency is declared to exist, and this exist and this act being immediately nec- act being immediately necessary for the essary for the preservation of the public preservation of the public peace, health, peace, health, and safety shall become and safety shall become effective on: (1) effectiveon: (1)Thedateofits approvalby The date ofits approval by the Governor; the Governor; (2) If the bill is neither (2) If the bill is neither approved nor approved norvetoed by the Governor, the vetoed by the Governor, the expiration of expiration of the period of time during the period oftime during which the Gov- which the Governor may veto the bill; or ernor mayveto the bill; or (3) Ifthe bill is (3) If the bill is vetoed by the Governor vetoed by the Governor and the veto is and the veto is overridden, the date the overridden, the date the last house over- last house overrides the veto." rides the veto." — 23-88-303. Arkansas Rural Risk Underwriting Association Plan of property insurance. (a)(1) All insurers licensed to transact property insurance, as defined in § 23-62-104, shall become members of the Arkansas Rural Risk Underwriting Association. (2) For the purposes ofthis section, farmers' mutual aid associations or companies are insurers and are subject to the assessments and other requirements imposed on insurers under this section. (b) This association or company shall provide a plan of property insurance to insurable rural risk applicants. Rural risk applicants are those applicants seeking insurance on risks located in geographic areas to be determined "rural areas" by the governing board, subject to the approval ofthe Insurance Commissioner. 23-88-306 PUBLIC UTILITIESAND REGULATED INDUSTRIES 4 History. Acts 1985 (1st Ex. Sess.), No. 25, § 3; A.S.A. 1947, § 66-6103; Acts 2005, No. 2004, § 5. 23-88-306. Provisions of plan. (a)(1) The plan shall provide for the efficient, economical, and fair administration of the Arkansas Rural Risk Underwriting Association and shall be consistent with the purposes ofthis subchapter. Therefore, the plan shall include provisions for the equitable apportionment among the association's members of the expenses, profits, and losses arising from the association's rural risk writings. (2) A member's participation in the association's expenses, profits, and losses shall be in the proportion that the net direct property insurance premiums of each member, written in this state during the preceding calendar year, bears to the aggregate net direct property insurance premiums of all members ofthe association, written in this state during the preceding calendar year. (3)(A) The governingboard shall be empowered to make assessments as may be necessary to provide funds needed to make payment ofall loss claims and expenses ofthe association. (B) Assessments during a calendar year may be made up to, but not in excess of, two percent (2%) ofeach insurer's net direct written premium for the preceding calendar year. (C) Ifthe maximum assessment in any calendar year results in a deficiency in premiums to losses, assessments may be made in the next and any successive calendar year. (4) Further, the plan shall provide for an annual credit to members for basic property insurance voluntarily written on rural risks. This dollar credit shall relieve a member wholly or partially from participation in the association's expenses and losses. (b) The plan shall also establish reasonable underwriting standards, subject to the approval of the Insurance Commissioner. Any applicant that meets these standards will be an insurable risk and entitled to property insurance through the association. (c) The plan shall include deductibles, rules for classification ofrisks, rate modifications consistent with the objective ofproviding and main- taining funds sufficient to pay rural risk losses and expenses, and the limits ofcoverage available. (d) The commissioner shall assess all members an amount not to exceed two hundred dollars ($200) annually, ifneeded, for the expense ofmailing fire department renewal subscription notices. History. Acts 1985 (1st Ex. Sess.), No. 25, § 5; A.S.A. 1947, § 66-6105; Acts 2003, No. 1326, § 1; 2007, No. 588, § 1. 5 PROPERTY INSURANCE 23-88-501 RESEARCH REFERENCES U.Ark. Little Rock L. Rev. Survey of Survey of Legislation, 2003 Arkansas Legislation, 2003 Arkansas General As- General Assembly, Insurance Law, Home sembly, Insurance Law, Fire Department Loan Protection Act, 26 U. Ark. Little Renewal Subscription Expenses, 26 U. Rock L. Rev. 484. Ark. Little Rock L. Rev. 484. — Subchapter 5 Portable Electronics Insurance SECTION. SECTION. 23-88-501. Definitions. 23-88-505. Suspension orrevocation ofli- 23-88-502. Licensure ofvendors. cense. 23-88-503. Requirements for sale of por- 23-88-506. Termination of portable elec- table electronics insur- tronics insurance. ance. 23-88-507. Application for license and 23-88-504. Authority ofvendors to sell or fees. offer portable electronics insurance. 23-88-501. Definitions. As used in this subchapter: (1) "Customer" means a person who purchases portable electronics or sei^ices; (2) "Enrolled customer" means a customer who elects to have coverage under a portable electronics insurance policy issued by a vendor; (3) "Location" means, as directed to residents ofthe State ofArkan- sas: A (A) physical location in this state; A (B) website; or A (C) call center site or similar location; (4) "Portable electronics" means electronic devices that are portable in nature, including the accessories and services related to the use of the electronic device; (5)(A) "Portable electronics insurance" means insurance for the re- pair orreplacement ofportable electronics that includes the following causes ofloss: (i) Loss; (ii) Theft; and (iii) Inoperability due to mechanical failure, malfunction, damage, or other similar causes ofloss. (B) "Portable electronics insurance" does not include a service contract governed by the Service Contracts Act, § 4-114-101 et seq.; (6) "Portable electronics transaction" means: (A) The sale or lease to a customer of portable electronics by a vendor; or (B) The sale ofa service related to the use ofportable electronics to a customer by a vendor; (7) "Supervising entity" means a business entity thatis an insurer or insurance producer licensed under the insurance laws ofthis state; and 23-88-502 PUBLIC UTILITIESAND REGULATED INDUSTRIES 6 (8) "Vendor" means a person that engages in the business ofportable electronics transactions. History. Acts 2011, No. 1018, § 1. 23-88-502. Licensure of vendors. A (a) vendor is required to hold a limited lines license to sell or offer coverage under a portable electronics insurance policy. (b) Alimited lines license issued under this subchapter shall autho- rize an employee or authorized representative ofthe licensee to sell or offer coverage under a policy of portable electronics insurance to a customer at locations the vendor engages in the business of portable electronics transactions. A (c) supervising entity shall: (1) Maintain a registry of vendor locations that are authorized to offer coverage for portable electronics in this state; and (2) Produce the registry for inspection and examination during its regular business hours upon receipt of a ten-day notice from the Insurance Commissioner. (d) A license issued under this subchapter authorizes the licensee and its employees or authorized representatives to engage in the activities authorized by this subchapter. History. Acts 2011, No. 1018, § 1; Amendments. The 2013 amendment 2013, No. 340, § 1. rewrote (c). 23-88-503. Requirements for sale of portable electronics insurance. (a) At a location where portable electronics insurance coverage is offered to customers, a prospective customer shall receive written disclosure that states: (1) Portable electronics insurance may provide duplication ofcoverage provided by a customer's homeowner's insurance policy, renter's insurance policy, or other source ofcoverage; (2) The enrollment by the customer for portable electronics insurance coverage is not required in order to purchase or lease portable electronics devices or services; (3) The material terms ofthe insurance coverage, to include: (A) The identity ofthe insurer; (B) The identity ofthe supervising entity; (C) The amount of an applicable deductible; (D) An explanation of the individual that is responsible for the applicable deductible; (E) Benefits ofthe coverage; and (F) Key terms and conditions ofcoverage, including without limitation whether or not portable electronics may be repaired or re- placed with similar make and model reconditioned or nonoriginal manufacturer parts or equipment; 7 PROPERTY INSURANCE 23-88-504 (4) The process for filing a claim, including: (A) A description ofhow to return portable electronics; and (B) The maximum fee ifthe customer fails to comply with requirements for returning the portable electronics; and (5)(A) An enrolled customer may cancel a portable electronics insurance policy at any time. (B) The person paying the premium shall receive a refund of the unearned premium. (b) A vendor that has been issued a group or master commercial inland marine policy may offer portable electronics insurance on a month-to-month or other periodic basis for its enrolled customers, (c) Eligibility and underwriting standards for customers to enroll in coverage are to be established by the supervising entity for a portable electronics insurance policy before offering the portable electronics insurance to a customer. History. Acts 2011, No. 1018, § 1. 23-88-504. Authority of vendors to sell or offer portable electronics insurance. (a)(1) Employees and authorized representatives ofvendors may sell or offer portable electronics insurance to customers without a license as an insurance producer if: (A) The vendor obtains a limited lines license; and (B)(i) The insurerissuingthe portable electronics insurance super- vises or appoints a supervising entity to supervise the insurance coverage policies, including development of a training program for vendors. (ii) The training program for vendors shall: (a) Be delivered to employees and authorized representatives ofa vendor who are directly engaged in the activity ofselling or offering portable electronics insurance; and (h) Provide basic instruction about the portable electronics insurance offered to customers and the written disclosures required under § 23-88-503. (iii)(aj The training program for vendors may be provided in an electronic format. (b) Ifthe training program for vendors is provided in an electronic format, the supervising entity shall implement a supplemental education program regarding the portable electronics insurance coverage that is supervised by licensed employees ofthe supervising entity. (2) An employee or authorized representative of a vendor shall not: (A) Advertise, represent, or otherwise hold himself or herself out as a licensed nonlimited lines insurance producer; or (B)(i) Be compensated based primarilyon the number ofcustomers enrolled for portable electronics insurance coverage. 23-88-505 PUBLIC UTILITIESAND REGULATED INDUSTRIES 8 (ii) An employee or authorized representative of a vendor may receive compensation for activities under a limited lines license that is incidental to his or her overall compensation. (b)(1)(A) Charges for portable electronics insurance may be billed and collected by the vendor. A (B) charge that is not included in the cost associated with the purchase or lease of portable electronics or related services shall be itemized separately on the enrolled customer's bill. (C) Ifportable electronics insurance is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the enrolled customer that the portable electronics insurance is included. (2)(A) Vendors billing and collecting charges for portable electronics insurance shall not be required to maintain the funds in a segregated account ifthe vendor: (i) Is authorized by the insurer to hold the funds in an alternative manner; and (ii) Remits the amount to the supervising entity within sixty (60) days ofreceipt by the vendor. (B) The funds received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor acting in a fiduciary capacity for the benefit of the insurer. (C) Vendors may receive compensation from the insurer for billing and collection services authorized under this section. History. Acts 2011, No. 1018, § 1. 23-88-505. Suspension or revocation of license. If a vendor, its employee, or its authorized representative violates a provision of this subchapter, the Insurance Commissioner may after notice and a hearing impose on the vendor: (1) Fines not to exceed five hundred dollars ($500) per violation or five thousand dollars ($5,000) in the aggregate; and (2) Other penalties that the commissioner deems necessary and reasonable to carry out the purpose of this subchapter, including without limitation: (A) Suspending the privilege of transacting portable electronics insurance at specific business locations where violations have oc- curred; and (B) Suspending or revoking the ability ofindividual employees or authorized representatives ofthe vendor to act under a license issued under this subchapter. History. Acts 2011, No. 1018, § 1.