Arkansas Surplus Lines flashcards
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- Surplus Lines Broker License
- A license issued by the Arkansas Insurance Department allowing a producer to place insurance with eligible surplus lines insurers when authorized insurers decline coverage.
- Diligent Effort
- The requirement that a surplus lines broker must attempt to obtain coverage from authorized insurers before placing coverage with a surplus lines insurer.
- Annual Surplus Lines Report
- A report due by March 1 each year summarizing all surplus lines premiums written by the broker in the prior calendar year.
- Premium Tax Rate
- The tax rate of 4% applied to surplus lines premiums, collected by the broker from the insured and remitted to the Arkansas Insurance Department.
- Record Retention Period
- Surplus lines brokers must keep records of each transaction for at least five years after the policy expiration or cancellation.
- Quarterly Premium Report
- A report filed with the Arkansas Insurance Department every quarter listing surplus lines premiums written during that quarter.
- License Renewal Cycle
- Surplus lines broker licenses are renewed every two years, in alignment with the producer license renewal schedule.
- Surety Bond Requirement
- The Commissioner may require a surplus lines broker to maintain a surety bond or deposit as a condition of licensure.
- Eligible Surplus Lines Insurer
- An insurer that is authorized in its home state, meets minimum financial standards, and is approved by the Commissioner to write surplus lines in Arkansas.
- Eligible Insurer List
- A roster maintained by the Arkansas Insurance Department of surplus lines insurers authorized to write business in the state.
- Minimum Capital and Surplus
- The financial threshold of at least $15 million, or as set by the Commissioner, that a surplus lines insurer must maintain.
- Annual Financial Statement
- A financial report that eligible surplus lines insurers must file each year with the Arkansas Insurance Department.
- Insurer Examination
- The Arkansas Insurance Department may conduct an examination of the affairs of any eligible surplus lines insurer.
- Trust Fund Requirement
- The Commissioner may require a surplus lines insurer to maintain a trust fund or deposit for the protection of Arkansas policyholders.
- Removal from Eligible List
- The Commissioner may remove an insurer from the eligible list for failing to meet financial or reporting requirements.
- Domicile Authorization
- A surplus lines insurer must be authorized to write surplus lines insurance in its state of domicile.
- Written Declination
- A document from an authorized insurer stating that it has declined to provide coverage for the risk.
- Surplus Lines Disclosure
- A written notice to the insured that the surplus lines insurer is not licensed in Arkansas and is not covered by the state guaranty association.
- Surplus Lines Stamp
- A marking on the policy indicating that it is surplus lines coverage and showing the name and address of the surplus lines broker.
- Placement Notice Deadline
- The broker must provide the insured with a written notice of the surplus lines placement within 30 days of binding coverage.
- Guaranty Association Exclusion
- Surplus lines policies are not covered by the Arkansas Insurance Guaranty Association, so the insured bears the risk of insurer insolvency.
- Eligible List Verification
- The broker must confirm that the surplus lines insurer is on the Arkansas eligible list at the time the coverage is placed.
- Premium Comparison Prohibition
- Surplus lines coverage may not be placed solely to obtain a lower premium if authorized insurers are willing to provide coverage.
- Diligent Search Documentation
- The broker must document the search for authorized coverage, including declinations from at least one authorized insurer.
- Continuing Education Requirement
- Arkansas producers must complete 24 hours of continuing education every two years, including 3 hours of ethics.
- Address Change Reporting
- A producer must notify the Insurance Commissioner of any change of address within 30 days.
- Administrative Action Reporting
- A producer must report to the Commissioner within 30 days any administrative action taken against the producer in another jurisdiction.
- Fiduciary Premium Handling
- Producers must hold premium funds in a fiduciary capacity and may not commingle them with personal funds.
- Commission Disclosure
- Producers must provide a written disclosure of commissions to clients upon request.
- License Suspension or Revocation
- The Commissioner may suspend or revoke a producer license for misrepresentation, fraudulent practices, or failure to comply with state law.
- Violation Penalties
- The Commissioner may impose fines of up to $1,000 per violation, or up to $5,000 for willful violations of the insurance code.
- Producer Bond Requirement
- Producers must maintain a surety bond or deposit if required by the Commissioner, with the amount set by regulation.