Table Of Content

Arkansas Code OF 1987 Annotated SUPPLEMENT 2011 VOLUME 24B Place in pocket of bound volume Prepared by the Editorial Staffofthe Publisher Under the Direction and Supervision ofthe ARKANSAS CODE REVISION COMMISSION Senator David Johnson, Chair Senator Sue Madison Representative John Vines Representative Darrin Williams Honorable Bettina E. Brownstein Honorable Don Schnipper Honorable David R. Matthews Honorable Stacy Leeds, Dean, University ofArkansas at Fayetteville, School ofLaw Honorable John DiPippa, Dean, University ofArkansas at Little Rock, School ofLaw Honorable Warren T. Readnour, SeniorAssistant Attorney General Honorable Marty Garrity, Assistant Director for Legal Services of the Bureau ofLegislative Research LexisNexis® © Copyright 2005, 2007, 2009, 2011 BY The State ofArkansas All Rights Reserved LexisNexis andthe KnowledgeBurstlogoareregisteredtrademarks, andMichieis atrademark ofReedElsevierPropertiesInc.usedunderlicense. MatthewBenderisaregisteredtrademarkof Matthew BenderProperties Inc. For information about this Supplement, see the Supplementpamphletfor Volume 1 5055719 ISBN 978-0-327-10031-7 (Code set) ISBN 978-0-8205-8505-5 (Volume 24B) LexisNexis* Matthew Bender & Company, Inc. 701 East Water Street, Charlottesville, VA 22902 www.lexisnexis.com (Pub.40604) 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 88. PROPERTY INSURANCE. 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. 97. LONG-TERM CARE INSURANCE. 99. HEALTH CARE PROVIDERS. 100. STATE INSURANCE DEPARTMENT CRIMINAL INVESTIGATION DIVI- SION TRUST FUNDACT. 102. ARKANSAS EARTHQUAKEAUTHORITYACT. 103. TITLE INSURANCE. SUBTITLE MISCELLANEOUSREGULATED INDUSTRIES 4. CHAPTER. 110. ARKANSAS HORSE RACING LAW. 111. ARKANSAS GREYHOUND RACING LAW. 112. ARKANSAS MOTORVEHICLE 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 RiskUnderwriting. 5. Portable Electronics Insurance. 23-88-102 PUBLIC UTILITIES AND REGULATED INDUSTRIES 2 — Subchapter 1 General Provisions SECTION. 23-88-102. Paying costs ofvolunteer fire department services. 23-88-102. Paying costs ofvolunteer fire department services. (a) The amount chargedby avolunteerfire departmentforthe 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 ofthe 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 nonmember s, 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 courtwithinten (10) days askingfor the amount claimed by the fire department. (B) The district court shall give a hearingon 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. History. Acts 1987, No. 836, § 2; 1991, substituted "five hundred dollars ($500)" No. 984, §§ 1, 2; 1997, No. 1150, § 5; for "three hundred dollars ($300)" in (a); 2007, No. 581, § 2. and "thirty (30)" for "ten (10)" in (b)(2). Amendments. The 2007 amendment PROPERTY INSURANCE 23-88-303 — 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. Emergencyclause 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- oftheStateofArkansasthatfireisone(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 losses; andthattheannualassessmenton or companies are inadequate for the pro- rural risk underwriters which provided tection ofthe public and that this act is reimbursement for the mailing offire de- immediatelynecessaryinordertoprovide partmentrenewalsubscriptionnoticesex- 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)Thedateofitsapprovalby 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 bythe 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 ernormayveto the bill; or(3) Ifthebill 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 ofproperty insurance. (a)(1) All insurers licensedto transactpropertyinsurance, as denned in § 23-62-104, shall become members of the Arkansas Rural Risk UnderwritingAssociation. (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 seekinginsurance on risks located in geographic areas to be determined "rural areas" by the governing board, subject to the approval ofthe Insurance Commissioner. History. Acts 1985 (1st Ex. Sess.), No. 25, § 3; A.S.A. 1947, § 66-6103; Acts 2005, No. 2004, § 5. 23-88-306 PUBLIC UTILITIES AND REGULATED INDUSTRIES 4 23-88-306. Provisions ofplan. (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 shallbe empoweredto 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 ofthe 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 forclassification 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. Amendments. The 2007 amendment 25, § 5; A.S.A. 1947, § 66-6105; Acts rewrote (d). 2003, No. 1326, § 1; 2007, No. 588, § 1. 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. 5 PROPERTY INSURANCE 23-88-501 — 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 ofpor- 23-88-506. Termination of portable elec- table electronics insur- tronics insurance, ance. 23-88-507. Application for license and 23-88-504. Authorityofvendors 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 services; (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- pairorreplacement ofportable electronics thatincludes 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) "Supervisingentity" means abusiness entitythatis aninsureror insurance producer licensed underthe insurance laws ofthis state; and (8) "Vendor" means a person that engages in the business ofportable electronics transactions. History. Acts 2011, No. 1018, § 1. 23-88-502 PUBLIC UTILITIES AND REGULATED INDUSTRIES 6 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. (c) Upon application for a limited lines license, the vendor shall provide a list to the Insurance Commissioner of the locations in this state where it offers coverage for portable electronics and at each calendar quarter thereafter. (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. 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; (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 ofthe unearned premium. PROPERTY INSURANCE 23-88-504 7 (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 (b) Provide basic instruction about the portable electronics insurance offered to customers and the written disclosures required under § 23-88-503. (iii)(a) 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 ofa vendor shall not: (A) Advertise, represent, or otherwise hold himself or herself out as a licensed nonlimited lines insurance producer; or (B)(i) Be compensatedbasedprimarilyon thenumberofcustomers enrolled for portable electronics insurance coverage. (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 ofportable 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 23-88-505 PUBLIC UTILITIES AND REGULATED INDUSTRIES 8 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 ofthe 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. Ifa 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 ofthevendorto act under a license issued under this subchapter. History. Acts 2011, No. 1018, § 1. 23-88-506. Termination of portable electronics insurance. (a) Notwithstanding any other law: (1) An insurer may terminate or otherwise change the terms and conditions of a portable electronics insurance policy only ifthe policy- holderand enrolled customer areprovidedwith atleastthirty(30) days' notice; and (2) If the insurer changes the terms and conditions of a portable electronics insurance policy, the insurer shall provide the vendor and enrolled customer with: A (A) revised policy or endorsement; A (B) revised certificate or endorsement;