2010 Arkansas Code
Title 23 - Public Utilities and Regulated Industries
Subtitle 3 - Insurance
Chapter 90 - Arkansas Property And Casualty Insurance Guaranty Act
§ 23-90-112 - Estimation of amount needed to pay claims -- Assessment of insurers.

23-90-112. Estimation of amount needed to pay claims -- Assessment of insurers.

(a) (1) Whenever a court of competent jurisdiction determines that an insurer has become an insolvent insurer, the receiver appointed in accordance with 23-68-101 -- 23-68-113 and 23-68-115 -- 23-68-132 shall promptly estimate the amount of additional funds needed to supplement the assets of the insolvent insurer and any available amounts in the fund described in 23-90-114 which are immediately available to the receiver for the purpose of making payment of all covered claims.

(2) Thereafter, the Insurance Commissioner shall be empowered to make such assessments as may be necessary to produce the additional funds needed to make payment of all covered claims.

(3) The commissioner may make partial assessments as the actual need for additional funds arises for each insolvent insurer.

(b) (1) The commissioner shall assess individual insurers in proportion to the ratio that the total net direct written premium collected in the State of Arkansas by the insurer during the preceding calendar year bears to the total net direct written premium collected by all insurers, except insolvent insurers, in the State of Arkansas for the preceding calendar year.

(2) Assessments during a calendar year may be made up to, but not in excess of, two percent (2%) of each insurer's net direct written premium for the preceding calendar year.

(3) If the maximum assessment in any calendar year does not provide an amount sufficient for payment of covered claims of insolvent insurers, assessments may be made in the next and successive calendar years.

(c) Insurers determined to be insolvent insurers by a court of competent jurisdiction shall be exempt from assessment from and after the date of that determination and until the commissioner determines that the insurer is no longer an insolvent insurer.

(d) (1) It shall be the duty of each insurer to pay the amount of its assessment to the receiver within thirty (30) days after the commissioner gives notice of the assessment, and assessments may be collected by the receiver through suits brought for that purpose.

(2) Venue for suits shall lie in Pulaski County.

(3) The receiver shall not be required to give an appeal bond in any cause arising hereunder.

(e) Funds derived from assessments under the provisions of this chapter shall not become assets of the insolvent insurer but shall be deemed a special fund loaned to the receiver for payment of covered claims. This loan shall be repayable to the extent available from the funds of the insolvent insurer, as provided in this chapter.