1. (a) Agreements with unauthorized insurers. Any authorized insurer that enters into any agreement of bulk or assumptive reinsurance with an unauthorized insurer which provides for the ceding of Arkansas policies or risks shall file the proposed agreement of reinsurance by petition addressed to the Insurance Commissioner and filed in the following manner:

   1. (1)

      1. (A) The petition and proposed agreement shall be filed with the commissioner no less than sixty (60) days prior to the effective date of the proposed agreement.
      2. (B) Six (6) copies of the petition and proposed agreement shall be mailed to the commissioner in care of the Legal Division of the State Insurance Department;

   2. (2)

      1. (A) The petition shall:

2. (i) Contain the notarized signatures of an officer of each company or entity party to the agreement;

   1. (ii) Identify the specific line or class of business to be ceded, including the specific name or form number of any policies involved in the agreement; and

      1. (iii) Also state the number of Arkansas policies or risks and the amount in total gross premium of the Arkansas policies or risks to be ceded.
      2. (B) The proposed effective date of the agreement shall be specifically set out in a separate paragraph of the petition;

   2. (3)

      1. (A) A sample certificate of assumption or notice to the policyholder shall be filed with the petition and proposed agreement.
      2. (B) The sample certificate or notice to the policyholder shall conform to the standards set out in 23 CAR § 20-106;
   3. (4) Any service or administration agreements executed pursuant to the proposed reinsurance agreement shall be filed as a part of the petition and agreement;

   4. (5)

      1. (A) A current audited financial statement of the unauthorized insurer shall be filed along with the petition and proposed agreement.
      2. (B) If the unauthorized insurer is licensed to do business in another state of the United States then a copy of the NAIC Annual Statement (Convention Blank Form) for the year immediately preceding the effective date of the proposed agreement may be submitted;

   5. (6)

      1. (A) Any letters, certificates, or orders from the appropriate insurance departments of any other state which has denied or granted approval to the proposed agreement shall be included as exhibits to the proposed agreement.
      2. (B) Also attached as an exhibit to the proposed agreement shall be a statement of all requests for approval, whether granted, denied, or pending, made in any other state where approval is required by such state;
   6. (7) If the unauthorized insurer is domiciled in the United States, a copy of the most recent financial examination by the insurance regulatory authority of the insurer's state of domicile shall be filed as an exhibit to the proposed agreement;
   7. (8) Any other information or documents which the commissioner may deem necessary to make a decision concerning the petition and proposed agreement shall be provided by any party to the agreement to which the commissioner’s request is directed; and

   8. (9) After notice and hearing, the commissioner may approve the agreement for reinsurance if it is found that the:

      1. (A) Agreement is fair and equitable and does not lessen or diminish any benefit to a policyholder which would have been provided by the ceding entity;
      2. (B) Agreement promotes the public interest and does not create a monopoly;
      3. (C) Agreement is not harmful to the best interest of the policyholders;
      4. (D) Agreement will not impair the financial condition of either the ceding insurer or the assuming insurer;
      5. (E) Assuming insurer is in sound financial condition; and
      6. (F) Assumption certificates, after being filed with and approved by the commissioner, shall be given to Arkansas policyholders affected by the agreement, provided that notice to credit life and credit disability policyholders may be given to the creditor beneficiary of the credit life or credit disability policy.

3. (b) Agreements with authorized insurers. Any insurer authorized to do business in the State of Arkansas that enters into any agreement of bulk or assumptive reinsurance with another insurer authorized to do business in the State of Arkansas which provides for the ceding or assuming of Arkansas policies or risks shall file for approval of the agreement in the following manner:

   1. (1)

      1. (A) Six (6) copies of the letter requesting approval and the proposed agreement shall be sent to the commissioner in care of the Legal Division of the State Insurance Department.
      2. (B) The letter requesting approval shall be signed by an officer of each of the parties to the agreement;

   2. (2)

      1. (A) The letter and proposed agreement shall be filed no less than thirty (30) days prior to the effective date of the proposed agreement.
      2. (B) The letter shall identify the specific line or class of business to be ceded including the specific name or form number of any policies involved.
      3. (C) The letter shall also state the number of Arkansas policies and the amount of total gross premiums of the Arkansas policies or risk to be ceded; and

   3. (3) Any certificate of assumption to be issued in relation to the proposed agreement shall be attached as an exhibit to the proposed agreement and shall comply with the requirements of 23 CAR § 20-106.

      1. (c) Disapproval, appeal to circuit court.
   4. (1) If the commissioner shall disapprove any agreement of bulk or assumptive reinsurance filed for his or her approval pursuant to subsection (b) of this section, the commissioner or his or her representative shall so notify the parties to the agreement by certified mail.
   5. (2) Any party wishing to appeal the disapproval shall file a written request for hearing within thirty (30) days of receipt of the letter of disapproval.

   6. (3) If after hearing and an order thereon, any aggrieved party may appeal the commissioner’s order by requesting a review by the Pulaski County Circuit Court.

      1. (d) A proposed agreement shall be deemed to have been filed for approval on the date it is received by the Legal Division of the State Insurance Department.

Codification Notes: "NAIC" means National Association of Insurance Commissioners.