Arkansas Surplus Lines cheat sheet

A surplus lines broker license in Arkansas requires a valid producer license in property and casualty lines.

The Arkansas Surplus Lines Association (ASLA) administers the surplus lines broker examination and licensing process.

Surplus lines brokers must file an annual report with the Arkansas Insurance Department by March 1 for the prior calendar year.

A surplus lines broker must maintain a bond or deposit as determined by the Insurance Commissioner; the amount is set by regulation.

Surplus lines brokers must keep complete records of each surplus lines transaction for at least five years.

The surplus lines broker must verify that the insured has been denied coverage by authorized insurers before placing surplus lines coverage.

A surplus lines broker must pay a premium tax of 4% on surplus lines premiums, collected from the insured and remitted to the state.

Surplus lines brokers must file a quarterly report of surplus lines premiums written with the Arkansas Insurance Department.

License renewal for surplus lines brokers occurs every two years, aligned with the producer license renewal cycle.

An eligible surplus lines insurer must be authorized to write surplus lines insurance in its domicile and meet minimum capital and surplus requirements set by the Insurance Commissioner.

Arkansas maintains a list of eligible surplus lines insurers; only insurers on this list may write surplus lines in the state.

Eligible surplus lines insurers are not required to be licensed in Arkansas but must be authorized in their home state.

The Insurance Commissioner may remove an insurer from the eligible list for failure to meet financial or reporting requirements.

Surplus lines insurers must maintain a minimum capital and surplus of at least $15 million, or as otherwise determined by the Commissioner.

Eligible surplus lines insurers must file annual financial statements with the Arkansas Insurance Department.

Surplus lines insurers are subject to examination by the Arkansas Insurance Department.

The Commissioner may require surplus lines insurers to maintain a trust fund or deposit for the protection of Arkansas policyholders.

Surplus lines coverage may be placed only after the broker has made a diligent effort to procure coverage from authorized insurers.

The broker must obtain a written declination from at least one authorized insurer before placing coverage with a surplus lines insurer.

The surplus lines broker must disclose to the insured in writing that the insurer is not licensed in Arkansas and is not protected by the Arkansas Guaranty Association.

A surplus lines policy must be clearly stamped or marked as surplus lines and include the name and address of the surplus lines broker.

The broker must confirm that the surplus lines insurer is on the Arkansas eligible list at the time of placement.

Surplus lines coverage may not be placed for the purpose of securing a lower premium if authorized insurers are willing to provide coverage.

The broker must provide the insured with a written notice of the surplus lines placement within 30 days of binding coverage.

If the surplus lines insurer becomes insolvent, the Arkansas Insurance Guaranty Association does not cover the claim.

Arkansas producers must complete 24 hours of continuing education every two years, including 3 hours of ethics.

A producer must report any change of address to the Insurance Commissioner within 30 days.

The Commissioner may impose fines of up to $1,000 per violation of the insurance code, or up to $5,000 for willful violations.

A producer must notify the Commissioner within 30 days of any administrative action taken against the producer in another jurisdiction.

Producers must maintain a surety bond or deposit if required by the Commissioner; the amount is set by regulation.

A producer may not commingle premium funds with personal funds; premiums must be held in a fiduciary capacity.

The Commissioner may suspend or revoke a producer license for misrepresentation, fraudulent practices, or failure to comply with state law.

Producers must provide a written disclosure of commissions to clients upon request.