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Property Insurance

Ark. Code Ann. tit. 23, ch. 88
in effect

Ark. Code Ann. § 23-88-101 Valued policy law.

(a)(1) Except as provided in subsection (b) of this section, in case of a total loss by fire or natural disaster of the property insured, a property insurance policy other than for flood and earthquake insurance shall be held and considered to be a liquidated demand against the company taking the risk for the full amount stated in the property insurance policy or the full amount upon which the company charges, collects, or receives a premium. (2) For property covered under a commercial insurance policy, the amount paid under subdivision (a)(1) of this section shall be reduced by the amount of retention or deductible provided by the commercial insurance policy. (b) This section does not apply: (1) If a total loss by fire or a natural disaster other than a flood or an earthquake: (A) Is caused by the insured or someone acting on behalf of or in collusion with the insured, through: (i) A criminal act; (ii) Intentional misrepresentation; (iii) Fraud; or (iv) Deceit; or (B)(i) Is covered by two (2) or more property insurance policies that insure the same property. (ii) If two (2) or more property insurance policies insure the same property: (a) The insured shall recover the lesser of: (1) The face amount of the property insurance policy with the highest limit of coverage; or (2) The insured's interest in the property; and (b) Each insurer shall pay the proportionate share that its property insurance policy bears to the amount the insured is entitled to recover under subdivision (b)(1)(B)(ii)(a) of this section; (2) If the completed value of a building, structure, mobile home, or manufactured building is insured under a builder's risk insurance policy; (3)(A) If the claim is for the total loss of a building that is insured under a blanket insurance policy for a stated amount that covers two (2) or more buildings or that covers buildings and personal property. (B) Settlement of a claim for the total loss to a building that is insured by a blanket insurance policy for a stated amount that covers two (2) or more buildings or that covers buildings and personal property shall be based on an initial payment of the value assigned for the purpose of rating the policy to each affected building before the loss, with any balance remaining being settled according to the terms and conditions of the blanket insurance policy; or (4) To personal property or detached or appurtenant structures.

Ark. Code Ann. § 23-88-102 Paying costs of volunteer fire department services.

(a) The amount charged by a volunteer fire department for the 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 of the 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 nonmembers, 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 of the alarm is owned by a nonmember and insured in case of any damage resulting from a fire, the insurance company insuring the property against loss shall pay to the volunteer fire department the fair market value of its 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 of services shall be by certified mail within thirty (30) days after the date of the 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 court within ten (10) days asking for the amount claimed by the fire department. (B) The district court shall give a hearing on the matter within ten (10) days to determine if the amount claimed is fair compensation for the services rendered. (2) If the amount of the 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 of the policy unless the provisions of the policy provide otherwise.

Ark. Code Ann. § 23-88-103 Rate credits or reduced rates in rural fire protection districts or areas.

(a)(1) It is found and determined by the General Assembly that: (A) Rural fire protection districts are beneficial to all property owners in the districts; (B) Many of the districts are financed wholly or in part by dues or subscription payments made by members of the district; (C) Some owners of property in the districts fail or refuse to become members of and pay the dues or subscription charges to the district and that under present law insurance companies are permitted to give nonmember property owners the same rate credit as is granted to paying members of the district; and (D) The giving of equal rate credit to paying and nonpaying property owners in the district is most inequitable and should be corrected. (2) Therefore, it is the intent and purpose of this section to prohibit insurers from giving nonpaying property owners in rural fire protection districts the rate credit given paying members of the district. (b) Any property or casualty insurance company which gives any rate credit or any special reduced rates on risks located in a rural fire protection district or in any area protected by a rural fire department, which district or department is wholly or partially funded by assessments, dues, or subscription payments paid by owners of property located in the district or property owners who are members of an association supporting the rural fire department, shall give the rate credit or reduced rate only on risks insured by persons who pay the appropriate assessment, dues, or subscription payments for support of the district or department. (c)(1)(A) It is unlawful for any insurance agent or company to knowingly write an initial policy of fire insurance coverage on any risk located in a rural fire protection district or in any area protected by a rural fire department at any special reduced rate or with any rate credit based on the location of the risk in such a district or area without having first obtained from the insured or from the fire department providing service in the district or area evidence showing that a current assessment, dues, or subscription payments for the property to be insured have been paid to the fire department serving the area in which the insured property is located. (B) The evidence required by the insurer may be, but is not limited to, a receipt, cancelled check, or other valid proof of payment provided by the insured. (2)(A) If any agent is found by the Insurance Commissioner to have violated the provisions of this subsection, the agent shall be liable for an administrative penalty of one hundred dollars ($100) for the first violation and five hundred dollars ($500) for the second violation. (B) For any subsequent violation, the agent shall be liable for an administrative penalty of five hundred dollars ($500) plus an amount equal to the difference between the amount of the premium actually charged on the particular policy involved based on the special rate and the amount of premium which would have been charged if the special rate had not been applied.

Ark. Code Ann. § 23-88-104 Fire protection to be considered in property insurance rating plans.

When making a rate or rule filing, an insurer shall include an impact statement concerning the filing's effect on fire protection in the affected area unless the insurer utilizes a public protection classification system maintained by a licensed advisory organization.

Ark. Code Ann. § 23-88-105 Notice required prior to expiration of property insurance policy — Definition.

(a) Except for nonpayment of premium, the insurer shall give either a written notice of nonrenewal or an offer of renewal at least thirty (30) days prior to the expiration of the policy's existing term. (b) The insurer shall send the insured a written notice and the insurance producer written or electronic notice of the offer of renewal under subsection (a) of this section, indicating the new premium and providing a description of any change in deductible or policy provision in the renewal policy. (c) As used in this section, “renewal” means the issuance or delivery by an insurer of a policy superseding a policy previously issued by the insurer at the end of the previously issued policy period if the policy is delivered by: (1) The same insurer; or (2) An affiliate or subsidiary, as those terms are defined in § 23-63-503, that has a financial strength rating that is: (A) Issued by an industry-recognized independent insurance rating company; and (B) At least as good as the insurer issuing the superseded policy.

Ark. Code Ann. § 23-88-106 Expense depreciation applicable when determining value of damaged property in insurance policies — Definitions.

(a) As used in this section: (1) “Damaged property” means a damaged dwelling, a damaged structure, damaged personal property, or any other damaged property or service, the damage to which is covered under the terms of an insurance policy; and (2) “Expense depreciation” means depreciation, including but not limited to the cost of goods, materials, labor, and services necessary to replace, repair, or rebuild damaged property. (b) An insurance policy covering damaged property: (1) May allow for expense depreciation; and (2) Shall provide notice within the insurance policy in a form approved by the Insurance Commissioner that expense depreciation may be deducted. (c) If expense depreciation is applied to a loss for damaged property, the insurer shall provide a written explanation as to how the expense depreciation was calculated.

Ark. Code Ann. § 23-88-201 Purpose.

The purpose of this subchapter is to promote the public welfare by reducing the loss of life and fire damage to property caused by the crime of arson by requiring insurance companies to secure antiarson applications from applicants for new policies of property insurance containing information to control the incidence of arson fraud.

Ark. Code Ann. § 23-88-202 Definition.

As used in this subchapter, “antiarson application” means any application for insurance covering the peril of fire that includes certain questions which shall be answered by the applicant in addition to the basic information normally supplied to an insurer by an applicant.

Ark. Code Ann. § 23-88-203 Issuance of policy or renewal of contract prior to July 4, 1983.

(a) “Insurance policy” and “contract” shall not be construed to mean a property insurance policy issued prior to July 4, 1983, or contract that is being renewed. (b) However, assignment of the insurance policy or contract because of the transfer of a major financial interest in the insured real property shall require completion of an antiarson application if otherwise required by this subchapter.

Ark. Code Ann. § 23-88-204 Penalty.

Any insurer willfully violating the provisions of this subchapter shall be subject to a fine imposed by the Insurance Commissioner of not more than five hundred dollars ($500).

Ark. Code Ann. § 23-88-205 Promulgation of form by Insurance Commissioner.

(a) In promulgating the antiarson application form, the Insurance Commissioner shall consider generally recognized two-tier application forms. If the initial first-tier application elicits certain predesignated answers, then the administration of a second-tier supplementary application shall be mandatory. (b) The two-tier application shall secure the disclosure of information, including, but not limited to: (1) The name and address of the applicant and any mortgagees and any other parties who have an ownership interest in the property; (2) The amount of insurance requested and the method of valuation used to establish the amount of insurance; (3) The dates and selling prices of the property in all real estate transactions involving the property during the last three (3) years; (4) The applicant's loss history over the last five (5) years with regard to any property in which he or she held an equity interest or a mortgage and when any loss exceeded one thousand dollars ($1,000) in damages; (5) All taxes unpaid or overdue for one (1) or more years and any mortgage payments overdue by three (3) months or more; (6) All current violations of fire, safety, health, building, or construction codes on the property to be insured; and (7) The present occupancy of the structure.

Ark. Code Ann. § 23-88-206 Mandatory use.

(a) The use of the antiarson application shall be mandatory for commercial monoline fire policies, designated occupancies, and designated areas of the state, based upon a finding by the Insurance Commissioner, after a public hearing, that the commercial monoline fire policies, the designated occupancies, and the areas of the state have an abnormally high incidence of arson. (b) However, if the commissioner desires to extend the application of this subchapter to other than commercial monoline fire policies, he or she must first find, after public hearing, that the properties insured through those other types of policies are especially prone to arson. (c) Designation of any area of the state under this subchapter shall not be deemed a valid reason for refusal to write, for termination, or for nonrenewal of any policy or contract of insurance.

Ark. Code Ann. § 23-88-207 Requirement to enter into insurance contract.

(a) No insurer may enter into a contract to insure any building, except one (1) to four (4) family owner-occupied dwellings, against the peril of fire to be issued after July 4, 1983, unless the insurer first receives an antiarson application signed and affirmed by the insured, if required by the Insurance Commissioner in accordance with the provisions of this subchapter. (b)(1) Any antiarson application required by this subchapter shall be deemed a material part of the insurance policy to which the application pertains. (2) A material misrepresentation shall be deemed grounds to rescind the insurance policy.

Ark. Code Ann. § 23-88-208 Notification of change in information.

(a) Policyholders shall notify their insurer of any change in the information contained in the antiarson application, within a period of time to be specified. (b) A material failure to notify or a material misrepresentation in the notification shall be deemed grounds to rescind the insurance policy.

Ark. Code Ann. § 23-88-209 Alternative applications.

(a) The Insurance Commissioner may not mandate the use of any applications other than the antiarson application as defined in § 23-88-202. However, the commissioner may mandate alternative antiarson applications pursuant to a finding after a public hearing that: (1) There exist certain types of policies, certain classes of property, and certain geographic areas of the state which have abnormally high incidences of arson; (2) The antiarson application described in §§ 23-88-202, 23-88-203, 23-88-205, and 23-88-206 was implemented as respects such types of insurance policies, such classes of property, and areas of the state pursuant to the provisions of this subchapter; and (3) The use of the antiarson application pursuant to this subchapter failed to substantially decrease the arson problems for those types of insurance policies, classes of property, and geographic areas. (b) Alternative antiarson applications may be mandated only for the types of insurance policies, types of occupancies, and the areas of the state which would be permissible subjects for the antiarson application authorized by this subchapter.

Ark. Code Ann. § 23-88-210 Termination of policies or contracts.

(a) Despite any other provision of law which limits the time for termination of insurance policies to the contrary, an insurer may terminate any policy or contract of insurance when the antiarson application or any alternative antiarson application, as provided in § 23-88-209, is required at any time within ninety (90) days from the insurer's acceptance of the applications. (b) The notice of cancellation to the insured shall contain the specific reasons for the termination of the policy, provided that the reasons are not otherwise prohibited by law.

Ark. Code Ann. § 23-88-301 Legislative intent.

It is declared by the General Assembly of the State of Arkansas that adequate insurance upon property in the rural areas is necessary to the economic welfare of the state and that while the need for such insurance is increasing, the market for it is not adequate and may become less adequate in the future. It is the purpose of this subchapter to provide a mandatory plan to assure an adequate market for property insurance on insurable risks in the rural areas of Arkansas.

Ark. Code Ann. § 23-88-302 Definitions.

As used in this subchapter: (1) “Association” means the Arkansas Rural Risk Underwriting Association established pursuant to the provisions of this subchapter; (2) “Commissioner” means the Insurance Commissioner; (3) “Insurer” means any person who: (A) Writes any kind of insurance to which this subchapter applies under § 23-88-303, including the exchange of reciprocal or interinsurance contracts; and (B) Is licensed to transact insurance in this state; (4)(A) “Net direct written premiums” means the gross amount of premiums received from policies of insurance issued in this state to which this subchapter applies, less return premiums and dividends paid or credited to policyholders. (B) “Net direct written premiums” does not include premiums for indemnity reinsurance accepted from other licensed insurers, and there shall be no deduction for premiums for indemnity reinsurance ceded to other insurers; and (5) “Person” means any individual, corporation, partnership, association, or voluntary organization.

Ark. Code Ann. § 23-88-303 Arkansas Rural Risk Underwriting Association — Plan of property insurance.

(a)(1) All insurers licensed to transact property insurance, as defined in § 23-62-104, shall become members of the Arkansas Rural Risk Underwriting Association. (2) For the purposes of this 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 seeking insurance on risks located in geographic areas to be determined “rural areas” by the governing board, subject to the approval of the Insurance Commissioner.

Ark. Code Ann. § 23-88-304 Governing board.

For the plan or plans there shall be a governing board of seven (7) members to be appointed by the Insurance Commissioner, which shall meet at least annually to review and prescribe operating rules and which shall consist of the following members: (1) Four (4) members shall be representatives of foreign insurance companies, with those members to be appointed for terms of three (3) years; and (2) Three (3) members shall be representatives of domestic insurance companies, with those members to be appointed for terms of three (3) years.

Ark. Code Ann. § 23-88-305 Promulgation and approval of plan — Hearing.

(a) Within sixty (60) days following June 26, 1985, the governing board shall submit the plan to the Insurance Commissioner for his or her approval. (b) When the plan has been approved by the commissioner, all insurance companies authorized to transact the kinds of insurance set forth in § 23-88-303 shall subscribe to and participate in the plan. (c) If no plan meeting the purpose set forth in § 23-88-301 is submitted to the commissioner within the period of time specified, the commissioner shall prepare and promulgate a plan meeting those requirements. The commissioner may designate one (1) or more insurers or other agencies to assist him or her in the preparation, operation, and promulgation of a plan. (d) Notwithstanding the provisions contained in this section, no application shall be submitted to or accepted by the plan until the commissioner has determined, after a hearing, that a need for the implementation of the plan exists.

Ark. Code Ann. § 23-88-306 Provisions of plan.

(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 of this 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 bear to the aggregate net direct property insurance premiums of all members of the association written in this state during the preceding calendar year. (3)(A) The governing board shall be empowered to make assessments as may be necessary to provide funds needed to make payment of all loss claims and expenses of the association. (B) 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. (C) If the 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 of the 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 for classification of risks, rate modifications consistent with the objective of providing and maintaining funds sufficient to pay rural risk losses and expenses, and the limits of coverage available. (d) The commissioner shall assess all members an amount not to exceed two hundred dollars ($200) annually, if needed, for the expense of mailing fire department renewal subscription notices.

Ark. Code Ann. § 23-88-307 Liability of insurer.

It being the intention of this subchapter to provide an adequate market for the property insurance coverages defined in this subchapter, no insurer participating in this plan shall be liable for any damages which may result from any extra-contractual liability or for any act or omission of any kind, the insurer's liability being limited solely to the property insurance coverages provided for in this subchapter.

Ark. Code Ann. § 23-88-308 Commissioner's powers and duties.

(a) In addition to approving the plan of operation, the Insurance Commissioner shall have the authority to promulgate rules necessary to effect the purpose of this subchapter. (b) Further, after review of annual statements, other reports, and any other statistics which the commissioner deems necessary, the commissioner shall certify to the plan the aggregate net direct property insurance premiums written on property in this state by all members. This information will be used to determine a member's participation.

Ark. Code Ann. § 23-88-309 Appeals.

Any applicant for a policy, any persons insured under the plan, and any agency or insurer affected by the plan may appeal to the Insurance Commissioner any ruling or decision of the governing board or the authorized representative designated to operate a plan.

Ark. Code Ann. § 23-88-404 Notice regarding fire protection.

(a) In an effort to educate policyholders of the benefits of fire protection, every insurance company shall include in the premium notice to policyholders the following notice: (b) The notice prescribed by subsection (a) of this section shall be in 12-point type or larger. “IMPORTANT NOTICE REGARDING FIRE PROTECTION Did you know that the firefighting ability of your Fire Department helps lower your insurance rates? It's true! The better your firefighters are equipped and trained, the better their access to water for fighting fires, the length of time it takes for them to arrive at a fire, are a few of the many factors that have an impact on your property insurance rates. Help your firefighters help you! They need your support, financial and otherwise. Adequate funding is important to improving the protection that may translate to lower premiums!” Click to view form.

Ark. Code Ann. § 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 of the State of Arkansas: (A) A physical location in this state; (B) A website; or (C) A 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 repair or replacement of portable electronics that includes the following causes of loss: (i) Loss; (ii) Theft; and (iii) Inoperability due to mechanical failure, malfunction, damage, or other similar causes of loss. (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 of a service related to the use of portable electronics to a customer by a vendor; (7) “Supervising entity” means a business entity that is an insurer or insurance producer licensed under the insurance laws of this state; and (8) “Vendor” means a person that engages in the business of portable electronics transactions.

Ark. Code Ann. § 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) A limited lines license issued under this subchapter shall authorize an employee or authorized representative of the 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) A supervising entity shall: (1) Maintain a registry of vendor locations that are authorized to offer coverage for portable electronics in this state; and (2) Produce the registry for inspection and examination during its regular business hours upon receipt of a ten-day notice from the Insurance Commissioner. (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.

Ark. Code Ann. § 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 of coverage provided by a customer's homeowner's insurance policy, renter's insurance policy, or other source of coverage; (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 of the insurance coverage, to include: (A) The identity of the insurer; (B) The identity of the supervising entity; (C) The amount of an applicable deductible; (D) An explanation of the individual that is responsible for the applicable deductible; (E) Benefits of the coverage; and (F) Key terms and conditions of coverage, including without limitation whether or not portable electronics may be repaired or replaced with similar make and model reconditioned or nonoriginal manufacturer parts or equipment; (4) The process for filing a claim, including: (A) A description of how to return portable electronics; and (B) The maximum fee if the 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 of the unearned premium. (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 basis 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.

Ark. Code Ann. § 23-88-504 Authority of vendors to sell or offer portable electronics insurance.

(a)(1) Employees and authorized representatives of vendors 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 insurer issuing the portable electronics insurance supervises 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 of a vendor who are directly engaged in the activity of selling 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) If the 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 of the supervising entity. (2) An employee or authorized representative of a vendor shall not: (A) Advertise, represent, or otherwise hold himself or herself out as a licensed nonlimited lines insurance producer; or (B)(i) Be compensated based primarily on the number of customers 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. (B) A charge that is not included in the cost associated with the purchase or lease of portable electronics or related services shall be itemized separately on the enrolled customer's bill. (C) If portable electronics insurance is included with the purchase or lease of portable electronics or related services, the vendor shall 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 if the 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 of receipt 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 of the insurer. (C) Vendors may receive compensation from the insurer for billing and collection services authorized under this section.

Ark. Code Ann. § 23-88-505 Suspension or revocation of license.

If a 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 occurred; and (B) Suspending or revoking the ability of individual employees or authorized representatives of the vendor to act under a license issued under this subchapter.

Ark. Code Ann. § 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 if the policyholder and enrolled customer are provided with at least thirty (30) days' notice; and (2) If the insurer changes the terms and conditions of a portable electronics insurance policy, the insurer shall provide: (A) The vendor with a revised policy or endorsement; and (B) Each enrolled customer with: (i) A revised certificate, endorsement, updated brochure, or other evidence indicating that a change in the terms and conditions has occurred; and (ii) A summary of material changes to the portable electronics insurance policy coverage. (b) Notwithstanding subsection (a) of this section, an insurer may terminate an enrolled customer's coverage under a portable electronics insurance policy on fifteen (15) days' notice if the insurer discovers that fraud or material misrepresentation was used in obtaining coverage or in the presentation of a claim under the portable electronics insurance policy. (c) Notwithstanding subsection (a) of this section, an insurer may immediately terminate an enrolled customer's enrollment under a portable electronics insurance policy: (1) For nonpayment of premium; (2) If an enrolled customer ceases to have an active service with the vendor; or (3)(A) If an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within thirty (30) calendar days after exhaustion of the limit. (B) If notice to the enrolled customer is not timely sent by the insurer, enrollment and coverage shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer. (d)(1) If a portable electronics insurance policy is terminated by a policyholder, the policyholder shall mail or deliver written notice to the enrolled customer to advise the enrolled customer of the termination of the portable electronics insurance coverage and the effective date of termination. (2) The written notice shall be mailed or delivered to the enrolled customer at least thirty (30) days before the termination by the policyholder. (e)(1) When notice is required under this subchapter, the notice shall be in writing and may be mailed or delivered by registered mail to: (A) The vendor at the vendor's last known mailing address; and (B) The vendor's affected enrolled customers' last known mailing addresses on file with the insurer. (2)(A) If notice is completed through the mail, the person providing notice shall maintain proof of mailing. (B) An insurer may comply with a notice requirement under this subchapter by providing electronic notice to a vendor or its affected enrolled customers through electronic means. (C) If notice is completed through electronic means, the insurer shall maintain proof that the notice was sent.

Ark. Code Ann. § 23-88-507 Application for license and fees.

(a)(1) An application for licensure under this subchapter shall be made to and filed with the Insurance Commissioner on forms prescribed and furnished by the State Insurance Department. (2) The application for licensure under this subchapter shall: (A)(i) Provide the name, residence address, and other information required by the commissioner for an employee or authorized representative of the vendor designated by the applicant as the person responsible for the vendor's compliance with the requirements of this subchapter. (ii) If the vendor derives more than fifty percent (50%) of its revenue from the sale of portable electronics insurance, the information required in subdivision (a)(2)(A)(i) of this section shall be provided for all officers, directors, and shareholders of record that have beneficial ownership of ten percent (10%) or more of any class of securities registered under the federal securities law; (B)(i) Appoint the commissioner as authorized to receive service on behalf of the applicant for any legal process issued against it in a civil action or proceeding in this state brought in connection with portable electronics insurance coverage and agree that process of the commissioner shall be valid and binding against the applicant. (ii) The appointment under subdivision (a)(2)(B)(i) of this section shall: (a) Be irrevocable; (b) Bind the applicant and any successor in interest as to the assets or liabilities of the applicant; and (c) Remain in effect as long as the applicant's licensure remains in force in this state; and (C) Provide the location of the applicant's principal place of business or home office. (b) Applications for licensure under this subchapter shall be submitted within ninety (90) days of the application forms' being made available by the commissioner. (c) An initial license issued under this subchapter shall be valid for a period of twenty-four (24) months. (d)(1) A vendor of portable electronics applying for a limited lines license under this subchapter shall pay to the commissioner: (A) A nonrefundable application and license fee of one thousand dollars ($1,000); and (B) A renewal license fee of five hundred dollars ($500). (2) However, a vendor that is engaged in portable electronics transactions at ten (10) or fewer locations in the state applying for a limited lines license under this subchapter shall pay to the commissioner: (A) A nonrefundable application and license fee not to exceed one hundred dollars ($100); and (B) A renewal license fee not to exceed one hundred dollars ($100).

Ark. Code Ann. § 23-88-602 Definitions.

As used in this subchapter: (1) "Certificate of compliance" means a certificate of compliance with the most recent version of an applicable FORTIFIED Home construction standard from the Insurance Institute for Business & Home Safety or a successor entity; (2) "Construct" means to build, equip, install, or otherwise develop insurable dwelling; (3) "Cost to upgrade a single-family dwelling" means the cost required to upgrade a single-family dwelling to meet or exceed the construction standards required for the single-family dwelling to comply with the most recent version of applicable FORTIFIED Home construction standards published by the Insurance Institute for Business & Home Safety or a successor entity; (4)(A) "Insurable dwelling" means a single-family dwelling that is a detached structure and is located on, or affixed to, residential real estate. (B) "Insurable dwelling" does not include manufactured homes, mobile homes, or condominiums; (5) "Non-FORTIFIED dwelling" means a dwelling that does not comply with the most recent version of applicable FORTIFIED Home construction standards published by the Insurance Institute for Business & Home Safety or a successor entity; and (6) "Retrofitting" or "retrofit" is the process of modifying an existing building or structure after it has been constructed and occupied.

Ark. Code Ann. § 23-88-603 Strengthen Arkansas Homes Program.

(a) There is established within the State Insurance Department the Strengthen Arkansas Homes Program. (b) The program is created to provide financial grants to real property owners and nonprofit organizations to assist and promote the mitigation of losses to insurable dwellings due to catastrophic wind events, including hail, according to FORTIFIED Home construction standards published by the Insurance Institute for Business & Home Safety or a successor entity. (c) This subchapter does not create an entitlement for a property owner or obligate the state to fund the inspection, construction, or retrofitting of residential property in this state. (d) The department may apply for financial grants to construct or retrofit insurable dwellings to resist loss due to catastrophic wind events or hail and deposit the funds into the Strengthen Arkansas Homes Program Fund. (e)(1) The department may make grants or funding available to a nonprofit entity for a project to construct or retrofit an insurable dwelling to resist loss due to catastrophic wind events or hail if the grant or funding to a nonprofit entity is allowable under grant or funding rules, requirements, guidelines, or criteria. (2) A nonprofit entity under subdivision (e)(1) of this section shall: (A) Agree to administer the grants or funding as the program would be required to administer grants or funding; and (B) Provide documentation to the department in a timely manner as requested by the department. (f)(1) All mitigation projects shall be based upon the securing of required local permits and applicable inspections in keeping with local building codes and the Insurance Institute for Business & Home Safety's FORTIFIED Home construction standards as adopted by rule by the Insurance Commissioner. (2) All mitigation projects are subject to random reinspection.

Ark. Code Ann. § 23-88-604 Eligibility.

(a)(1) The owner of an insurable dwelling may apply for a grant under the Strengthen Arkansas Homes Program if the owner of an insurable dwelling meets the eligibility requirements as stated by the State Insurance Department for each grant type, either FORTIFIED Roof or FORTIFIED Silver. (2) The eligibility requirements under subdivision (a)(1) of this section shall include without limitation: (A) That the residential property owner shall own an insurable dwelling that has been granted a homestead exemption; (B) That the owner of the insurable dwelling shall claim his or her primary residence in a county where grants are being approved; (C) That an insurable dwelling to be constructed or retrofitted shall be an owner-occupied single-family primary residence; (D)(i) That the insurable dwelling shall be in good repair unless damaged by a catastrophic wind event or hail, and the insurable dwelling owner is eligible to receive a grant under this subchapter. (ii) The home repair shall not be part of an insurance claim; (E)(i) That an evaluator certified by the Insurance Institute for Business & Home Safety shall: (a) Prequalify the insurable dwelling as suitable for construction or retrofitting under the Strengthen Arkansas Homes Program; and (b) Identify improvements required to achieve an Insurance Institute for Business & Home Safety FORTIFIED Roof designation, FORTIFIED Silver designation, or a successor designation or a similar standard approved by rule by the Insurance Commissioner. (ii) The owner of the insurable dwelling shall: (a) Select the evaluator under subdivision (a)(2)(E)(i) of this section from a list provided by the department under the Strengthen Arkansas Homes Program; and (b) Pay the evaluator's fee out-of-pocket; and (F) That the owner of the insurable dwelling shall: (i)(a) Obtain bids from at least three (3) contractors certified by the Insurance Institute for Business & Home Safety and approved under the Strengthen Arkansas Homes Program. (b) If three (3) contractors certified by the Insurance Institute for Business & Home Safety are not available to provide bids in a geographic area where grants are offered, then a bid equivalent to the number of available contractors certified by the Insurance Institute for Business & Home Safety is acceptable under this subdivision (a)(2)(F)(i); (ii) Construct or retrofit the insurable dwelling to the Insurance Institute for Business & Home Safety FORTIFIED Roof designation or FORTIFIED Silver designation, or a successor designation or a similar standard approved by rule by the commissioner, which shall include a hail supplement; (iii)(a) Provide proof of an in-force policy providing wind insurance on the insurable dwelling. (b) If the owner of the insurable dwelling does not have wind insurance at the time of the grant application, he or she shall provide proof of wind insurance coverage within thirty (30) days from the time the insurable dwelling receives certification from the Insurance Institute for Business & Home Safety; and (iv)(a) If the insurable dwelling is in a Special Flood Hazard Area, provide proof of an in-force flood insurance policy. (b) The flood insurance policy under subdivision (a)(2)(F)(iv)(a) of this section may be from the National Flood Insurance Program or a private carrier. (b) An applicant for a Strengthen Arkansas Homes Program grant under this subchapter shall file an application with the department in the form and manner prescribed by the commissioner. (c) Documents, materials, and other information submitted to the department by the owner of an insurable dwelling or an insurance company in support of a Strengthen Arkansas Homes Program grant application shall be confidential and not subject to the Freedom of Information Act of 1967, § 25-19-101 et seq. (d)(1) Documents, materials, and other information submitted to the department by the owner of an insurable dwelling or an insurance company shall not be: (A) Subject to a public records request under the Freedom of Information Act of 1967, § 25-19-101 et seq.; (B) Subject to subpoena; (C) Subject to discovery; or (D) Admissible in evidence in a private civil action. (2) Subdivision (d)(1) of this section does not: (A) Apply to the disclosure of documents, materials, or other information to Arkansas Legislative Audit or to the Legislative Joint Auditing Committee as otherwise authorized by law; or (B) Preclude the subpoena authority under § 10-3-411 or § 10-4-421. (e) The owner of an insurable dwelling shall use Strengthen Arkansas Homes Program grant funds to retrofit an insurable dwelling to resist loss due to a catastrophic wind event or hail. (f)(1) Any mitigation project under this subchapter shall be completed within three (3) months of the date the applicant receives notice of the Strengthen Arkansas Homes Program grant approval. (2) Failure to complete the project in the time allotted under subdivision (f)(1) of this section may result in forfeiture of the Strengthen Arkansas Homes Program grant. (g)(1) Strengthen Arkansas Homes Program grant funds shall only be paid once a certificate of compliance has been issued for the Insurance Institute for Business & Home Safety FORTIFIED Roof designation, FORTIFIED Silver designation, or a successor designation or a similar standard approved by rule of the commissioner. (2) The Strengthen Arkansas Homes Program grant funds shall be paid by the commissioner, on behalf of the owner of the insurable dwelling, directly to the contractor who performed the loss mitigation work. (h)(1) Except as provided in subdivision (h)(2) of this section, the department shall accept Strengthen Arkansas Homes Program grant applications on a first-come, first-served basis. (2) An application submitted under subdivision (h)(1) of this section shall be given priority if the applicant: (A) Lives in a location that, based on historical data, has a higher susceptibility to catastrophic wind events or hail; or (B) Meets any other criteria the commissioner determines is appropriate to meet the purpose of the Strengthen Arkansas Homes Program. (i) The department may conduct a random audit of funds, records, and properties to detect fraud or for any other reason related to the administration of the Strengthen Arkansas Homes Program.

Ark. Code Ann. § 23-88-605 Contractor requirements.

(a) Under the Strengthen Arkansas Homes Program, the owner of an insurable dwelling shall hire a contractor certified by the Insurance Institute for Business & Home Safety who can perform work that satisfies the standards under this subchapter and the rules adopted by the Insurance Commissioner. (b) The State Insurance Department shall not endorse or otherwise provide preferential treatment to a contractor. (c)(1) The owner of an insurable dwelling is responsible for an amount owed to a contractor that exceeds awarded program grant funds. (2) The amount owed to a contractor that exceeds the awarded program grant funds shall be disclosed to the owner, reflected on the bid sheet, and approved by the owner before work begins. (3) A contractor shall not bill the owner for additional expenses after retrofit work is completed. (d) To be eligible to work on a project funded by the program as a contractor, a contractor shall: (1) Meet the program requirements under subsection (e) of this section; and (2) Maintain a current copy of all applicable certificates, licenses, and proof of insurance coverages with the program office. (e) The program requirements for a contractor to participate in the program include without limitation that the contractor: (1) Holds a valid and active contractor's license or registration in Arkansas and is free from all disciplinary action by the applicable licensing board; (2) Is registered to do business in Arkansas with the Secretary of State; (3) Has an in-force general liability policy with at least five hundred thousand dollars ($500,000) in liability coverage; (4) Has workers' compensation and employer's liability insurance as required by Arkansas law; (5)(A) Holds an active Insurance Institute for Business & Home Safety FORTIFIED Roof contractor certification or FORTIFIED professional certification. (B) The contractor is responsible for paying all fees associated with certification and training; (6) Has successfully registered as a supplier or payee with the Department of Finance and Administration; (7) Shall maintain accurate contact information with the State Insurance Department and notify the State Insurance Department within ten (10) days of any changes in his or her contact information; (8) Agrees to follow the program's procedures and rules as promulgated by the commissioner; (9) Shall not have a financial interest in a project funded by the program for which the contractor performs work other than receiving payment from the program on behalf of the owner of an insurable dwelling; (10) Shall report to the program any potential conflict of interest before work commences; and (11) Shall not be the evaluator for a project funded under the program.

Ark. Code Ann. § 23-88-606 Evaluator requirements.

(a) To be eligible to work on a project funded by the Strengthen Arkansas Homes Program as an evaluator, an evaluator shall: (1) Meet the program requirements under subsection (b) of this section; and (2) Maintain a current copy of all applicable certificates, licenses, and proof of insurance coverage with the program office. (b) The program requirements for an evaluator to participate in the program include that the evaluator: (1)(A) Is in good standing with the Insurance Institute for Business & Home Safety and maintains an active Insurance Institute for Business & Home Safety certification as a FORTIFIED Home evaluator, or other certification under a successor entity of the Insurance Institute for Business & Home Safety. (B) The evaluator shall pay all fees associated with certification and training; (2) If applicable, is registered to do business in Arkansas with the Secretary of State; (3) Agrees to follow the program's procedures and rules as promulgated by the Insurance Commissioner; (4) Shall maintain accurate contact information with the State Insurance Department and notify the department within ten (10) days of any changes in his or her contact information; (5) Shall not have a financial interest in any project that the evaluator inspects for designation purposes for the program; (6) Shall not be a contractor or supplier of any materials, products, or systems installed in a project the evaluator inspects for designation purposes for the program; (7) Shall not be the sales agent for a project being designated for the program; and (8) Agrees to inform the department of a potential conflict of interest.

Ark. Code Ann. § 23-88-607 Premium discount.

(a) An insurance company that writes property insurance for wind or hail coverage of any property located in this state that has been certified compliant with the most recent version of any applicable FORTIFIED Home construction standards published by the Insurance Institute for Business & Home Safety or a successor entity: (1) Shall provide a premium discount or rate reduction on the coverage if the discount or reduction is actuarially justified; or (2) May provide: (A) A premium discount or rate reduction on the coverage according to any standard discount amounts, targets, or benchmarks established under subsection (e) of this section; and (B) Any other adjustment on the coverage. (b) A premium discount, rate reduction, or other adjustment provided under subsection (a) of this section shall be subject to rate filing and other applicable regulatory requirements, including without limitation those under § 23-67-201 et seq. (c) An insurance company that offers a premium discount, rate reduction, or other adjustment under subdivision (a)(1) of this section shall provide the discount, reduction, or adjustment on the coverage of an insurable dwelling located in this state if the insurance company receives a copy of the certificate of compliance for the insurable dwelling. (d)(1) The Insurance Commissioner may promulgate rules that establish standard discount amounts, targets, or benchmarks for the coverage of any real property located in this state that has been certified compliant with the most recent version of any applicable FORTIFIED Home construction standards published by the Insurance Institute for Business & Home Safety or a successor entity. (2) Any standard discount amounts, targets, or benchmarks promulgated by the commissioner shall be: (A) Optional; and (B) Primarily for the benefit of insurance companies that are unable to obtain actuarially valid data to provide a premium discount or rate reduction under subdivision (a)(1) of this section due to inadequate resources or experience.

Ark. Code Ann. § 23-88-608 Policy endorsement for roof loss or repairs.

An insurance company writing property insurance for personal risks that provides coverage of a single-family dwelling located in this state that is a non-FORTIFIED dwelling shall offer an optional rider, endorsement, or supplemental policy provision that provides the insured a right to receive claim payments for the cost to upgrade a single-family dwelling for a claim that: (1) Is covered under the insurance policy or contract; and (2) Requires replacement of the covered insured dwelling’s roof as defined by the insurance policy or contract.

Ark. Code Ann. § 23-88-609 Insurer requirements.

A property insurer subject to §§ 23-88-607 and 23-88-608 shall: (1) Make any filings required under §§ 23-88-607 and 23-88-608; (2) Comply with any other regulatory requirements required under § 23-67-201 et seq.; and (3) Comply with any other laws that are necessary to ensure that: (A) Any premium discount or rate reduction required under § 23-88-607 is offered on an insurance policy or contract issued or renewed on and after July 1, 2026; and (B) The optional rider, endorsement, or supplemental policy provision required under § 23-88-608 is offered on an insurance policy or contract issued or renewed on and after July 1, 2026.

Ark. Code Ann. § 23-88-610 Rules.

(a) The Insurance Commissioner shall promulgate rules to implement and administer this subchapter. (b) The rules promulgated under subsection (a) of this section shall include eligibility requirements necessary for the proper administration of this subchapter and eligibility requirements under any instructions or requirements on grants or funds received by the commissioner for the Strengthen Arkansas Homes Program.
Source: Public.Resource.Org / UniCourt, Official Code of Arkansas Annotated, Release 78 (2020) (unicourt.github.io/cic-code-ar)URL: https://unicourt.github.io/cic-code-ar/transforms/ar/ocar/r78/gov.ar.code.title.23.htmlFetched: 11/8/2026

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