Stricken language would be deleted from and underlined language would be added to present law.
Act 261 of the Regular Session
*ANS131* 02/14/2025 7:50:08 AM ANS131
State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 236 3
4
By: Senator J. Boyd 5
By: Representative Steimel 6
7
For An Act To Be Entitled 8
AN ACT TO AMEND THE INSURANCE HOLDING COMPANY 9
REGULATORY ACT; AND FOR OTHER PURPOSES. 10
11
12
Subtitle 13
TO AMEND THE INSURANCE HOLDING COMPANY 14
REGULATORY ACT. 15
16
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 17
18
SECTION 1. Arkansas Code § 23 -63-503, concerning the definitions used 19
under the Insurance Holding Company Regulatory Act, is amended to add 20
additional subdivisions to read as follows: 21
(12) "Group capital calculation instructions" means the 22
instructions issued by the National Association of Insurance Commissioners 23
and adopted by rule by the commissioner; 24
(13)(A) "NAIC liquidity stress test framework" means the 25
publication of the National Association of Insurance Commissioners that 26
includes a history of the National Association of Insurance Commissioners' 27
development of regulatory liquidity stress testing, the scope criteria 28
applicable for a specific data year, and the liquidity stress test 29
instructions and reporting templates for a specific data year. 30
(B) "NAIC liquidity stress test framework" includes scope 31
criteria, instructions, and reporting templates; and 32
(14) "Scope criteria" means the designated exposure bases, and 33
the minimum magnitudes of the designated exposure bases for a specified data 34
year, used to establish a preliminary list of insurers considered scoped in 35
the NAIC liquidity stress test framework for that data year. 36 SB236
2 02/14/2025 7:50:08 AM ANS131
1
SECTION 2. Arkansas Code § 23 -63-505 is amended to read as follows: 2
23-63-505. Subsidiaries of insurer. 3
(a)(1) Authorization. Any A domestic insurer, subject to this 4
subchapter, either by itself or in cooperation with one (1) or more persons, 5
may organize or acquire one (1) or more subsidiaries. 6
(2)(A) The subsidiaries under subdivision (a)(1) of this section 7
may conduct any kind of business authorized by state law. 8
(B) Being a subsidiary of a domestic insurer does not 9
limit the authority of the subsidiary to conduct business. 10
(b) In addition to investments in common stock, preferred stock, debt 11
obligations, and other securities permitted under this subchapter, a domestic 12
insurer may: 13
(1)(A) Invest in common stock, preferred stock, debt 14
obligations, and other securities of one (1) or more subsidiaries in amounts 15
that do not exceed the lesser of ten percent (10%) of the domestic insurer’s 16
assets or fifty percent (50%) of the insurer’s surplus in relation to 17
policyholders if after the investments, the domestic insurer’s surplus is: 18
(i) Reasonable in relation to the domestic insurer’s 19
outstanding liabilities; and 20
(ii) Adequate to meet the domestic insurer's 21
financial needs. 22
(B) In calculating the amounts of investments under 23
subdivision (b)(1)(A) of this section, the investments shall include: 24
(i) The total net moneys or other consideration 25
expended and obligations assumed in the acquisition or formation of a 26
subsidiary, including all organizational expenses and contributions to 27
capital and surplus of the subsidiary, whether or not represented by the 28
purchase of capital stock or issuance of other securities; and 29
(ii) All amounts expended in acquiring additional 30
common stock, preferred stock, debt obligations, and other securities and all 31
contributions to the capital or surplus of a subsidiary after the acquisition 32
or formation of a subsidiary. 33
(C) In calculating the amount of investments under 34
subdivision (b)(1)(A) of this section, the investments in the domestic 35
insurer's or foreign insurance company's subsidiaries and health maintenance 36 SB236
3 02/14/2025 7:50:08 AM ANS131
organizations are excluded; 1
(2)(A) Invest any amount in common stock, preferred stock, debt 2
obligations, and other securities of one (1) or more subsidiaries engaged or 3
organized to engage exclusively in the ownership and management of assets 4
authorized as investments for the domestic insurer if each subsidiary agrees 5
to limit its investments in any asset so that the investments will not cause 6
the amount of the total investment of the domestic insurer to exceed any of 7
the investment limitations specified in subdivision (b)(1)(A) of this section 8
or in § 23-63-801 et seq., if applicable to the insurer. 9
(B) As used in subdivision (b)(2)(A) of this section, “the 10
total investment of the domestic insurer” includes: 11
(i) Any direct investment by the domestic insurer in 12
an asset; and 13
(ii) The domestic insurer’s proportionate share of 14
any investment in an asset by a subsidiary of the domestic insurer, and which 15
shall be calculated by multiplying the amount of the subsidiary’s investment 16
by the percentage of the ownership of the subsidiary; and 17
(3) With the approval of the Insurance Commissioner, invest any 18
greater amount in common stock, preferred stock, debt obligations, or other 19
securities of one (1) or more subsidiaries, if after the investments, the 20
domestic insurer’s surplus is: 21
(A) Reasonable in relation to the domestic insurer’s 22
outstanding liabilities; and 23
(B) Adequate to meet the domestic insurer's financial 24
needs. 25
(c) Qualification of Investment — When Determined. Whether any 26
investment pursuant to under subsection (a) of this section meets the 27
applicable requirements thereof of subsection (a) of this section is to be 28
determined immediately after the investment is made, taking into account the 29
then-outstanding principal balance on all previous investments in debt 30
obligations and the value of all previous investments in equity securities as 31
of the date they were made. 32
(c)(d) Cessation of Control. If an insurer ceases to control a 33
subsidiary, it shall dispose of any investment therein in the subsidiary made 34
pursuant to under this section within three (3) years from the time of the 35
cessation of control or within such further time as the Insurance 36 SB236
4 02/14/2025 7:50:08 AM ANS131
Commissioner commissioner may prescribe unless, at any time after the 1
investment shall have has been made, the investment shall have met the 2
requirements for investment under any other section of this subchapter and 3
the insurer has notified the commissioner thereof that those requirements for 4
investments have been met . 5
6
SECTION 3. Arkansas Code § 23 -63-510 is amended to read as follows: 7
23-63-510. Control of or merger with domestic insurer — Approval by 8
commissioner — Hearing. 9
(a) The Insurance Commissioner shall approve any merger or other 10
acquisition of control referred to in § 23 -63-506 unless, after a public 11
hearing thereon on the merger or other acquisition of control , he or she 12
finds that: 13
(1) After change of control, the domestic insurer referred to in 14
§ 23-63-506 would not be able to satisfy the requirements for the issuance of 15
a license to write the line or lines of insurance for which it is presently 16
licensed; 17
(2)(A) The effect of the merger or other acquisition of control 18
would be substantially to lessen competition in insurance in this state or 19
tend to create a monopoly therein in this state. 20
(B) In applying the competitive standard under subdivision 21
(a)(2)(A) of this section: 22
(i) The information required under §§ 23 -63-527(b) 23
and 23-63-528(b) shall not apply; 24
(ii) The merger or other acquisition of control 25
shall not be disapproved if the commissioner finds that any of the situations 26
meeting the criteria under § 23 -63-528(c) exist; and 27
(iii) The commissioner may condition the approval of 28
the merger or other acquisition of control on the removal of the basis of 29
disapproval within a specified period of time ; 30
(3) The financial condition of any acquiring party is such as 31
might jeopardize the financial stability of the insurer or prejudice the 32
interest of its policyholders or the interests of any remaining security 33
holders who are unaffiliated with the acquiring party; 34
(4) The terms of the offer, request, invitation, agreement, or 35
acquisition referred to in § 23 -63-506 are unfair and unreasonable to the 36 SB236
5 02/14/2025 7:50:08 AM ANS131
security holders of the insurer; 1
(5) The plans or proposals which the acquiring party has to 2
liquidate the insurer, sell its assets, or consolidate or merge it with any 3
person, or to make any other material change in its business or corporate 4
structure or management are unfair and unreasonable to policyholders of the 5
insurer and not in the public interest; or 6
(6) The competence, experience, and integrity of those persons 7
who would control the operation of the insurer are such that it would not be 8
in the interest of policyholders of the insurer and of the public to permit 9
the merger or other acquisition of control. 10
(b)(1) The public hearing referred to in subsection (a) of this 11
section shall be held within thirty (30) days after the statement required by 12
§ 23-63-506 is filed, and at least twenty (20) days' notice of the hearing 13
shall be given by the commissioner to the person filing the statement. 14
(2) Not less than seven (7) days' notice of the public hearing 15
shall be given by the person filing the statement to the insurer and to the 16
other persons as may be designated by the commissioner. 17
(3)(A) The commissioner shall make a determination within the 18
sixty-day period preceding the effective date of the proposed transaction. 19
(B) In connection with the change in control of the 20
insurer, any determination by the commissioner that the person acquiring 21
control of a domestic insurer shall be required to maintain or restore the 22
capital of the insurer to the level required by the laws and rules of this 23
state shall be made not later than sixty (60) calendar days after the date of 24
notification of the change in control submitted pursuant to § 23 -63-506(b). 25
(4) At the hearing, the person filing the statement, the 26
insurer, any person to whom notice of hearing was sent, and any other person 27
whose interests may be affected thereby shall have the right to present 28
evidence, examine, and cross -examine witnesses, and offer oral and written 29
arguments and, in connection therewith, shall be entitled to conduct 30
discovery proceedings in the same manner as is presently allowed in the 31
courts of this state. 32
(5) All discovery proceedings shall be concluded not later than 33
three (3) days prior to before the commencement of the public hearing. 34
(6)(A) If a proposed acquisition of control requires the 35
approval of more than one (1) state insurance commissioner, the public 36 SB236
6 02/14/2025 7:50:08 AM ANS131
hearing referred to in subsection (a) of this section may be held on a 1
consolidated basis upon request of the person filing the statement under § 2
23-63-506(a)(2)(A). 3
(B) The party requesting a consolidated hearing under 4
subdivision (b)(6)(A) of this section shall file the statement with the 5
National Association of Insurance Commissioners within five (5) days of the 6
request. 7
(C) A state insurance commissioner may opt out of a 8
consolidated hearing and shall provide notice to the applicant of the opt -out 9
within ten (10) days of receipt of the statement. 10
(D) A hearing conducted on a consolidated basis shall be: 11
(i) Public; and 12
(ii) Held within the United States before the 13
commissioners of the states in which the insurers are domiciled. 14
(E) The state insurance commissioners shall hear 15
testimony, examine witnesses, and receive evidence. 16
(F) A state insurance commissioner may attend a 17
consolidated hearing in person or by telecommunication. 18
19
SECTION 4. Arkansas Code § 23 -63-514(c), concerning materiality under 20
the Insurance Holding Company Regulatory Act, is amended to read as follows: 21
(c) Materiality. 22
(1)(A) No information need be disclosed on the registration 23
statement filed pursuant to subsection (b) of this section if the information 24
is not material for the purposes of this section. 25
(B) Unless the commissioner by rule or order provides 26
otherwise, sales, purchases, exchanges, loans, or extensions of credit, or 27
investments, involving one -half of one percent (0.5%) or less of an insurer's 28
admitted assets as of the December 31 next -preceding shall not be deemed 29
material for purposes of this section. 30
(C) For purposes of this section, materiality under this 31
subsection shall not apply for purposes of the group capital calculation 32
instructions or the NAIC liquidity stress test framework. 33
(2)(A) However, each registered insurer shall disclose in 34
writing to the commissioner within five (5) business days following the 35
declaration of a dividend and no less than ten (10) business days prior to 36 SB236
7 02/14/2025 7:50:08 AM ANS131
the payment of the dividend, all ordinary dividends payable to shareholders. 1
(B) The disclosure shall also be included in the reporting 2
insurer's next annual and restated insurance registration statement and upon 3
any statutory filing required under § 23 -63-514 or § 23-63-515. 4
5
SECTION 5. Arkansas Code § 23 -63-514(k) is repealed. 6
(k) Violations. The failure to file a registration statement or any 7
amendment thereto required by this section within the time specified for the 8
filing shall be a violation of this section. 9
10
SECTION 6. Arkansas Code § 23 -63-514, concerning the registration of 11
insurers, is amended to add additional subsections to read as follows: 12
(n) Group Capital Calculation. 13
(1) Except as provided below, the ultimate controlling person of 14
every insurer subject to this section shall concurrently file with the 15
insurer's registration an annual group capital calculation report as directed 16
by the lead state commissioner. 17
(2) The annual group capital calculation report under 18
subdivision (n)(1) of this section shall be: 19
(A) Completed according to the group capital calculation 20
instructions; and 21
(B) Filed with the lead state commissioner of the 22
insurance holding company system as determined by the Insurance Commissioner 23
according to the Financial Analysis Handbook procedures adopted by the 24
National Association of Insurance Commissioners, as adopted by rule of the 25
Insurance Commissioner. 26
(3)(A) The following insurance holding company systems are 27
exempt from filing an annual group capital calculation report under 28
subdivision (n)(1) of this section: 29
(i) An insurance holding company system that: 30
(a) Has only one (1) insurer within its 31
holding company structure; 32
(b) Is licensed and writes business only in 33
its domestic state; and 34
(c) Assumes no business from another insurer; 35
(ii)(a) An insurance holding company that is 36 SB236
8 02/14/2025 7:50:08 AM ANS131
required to perform a group capital calculation specified by the Board of 1
Governors of the Federal Reserve System. 2
(b) The lead state commissioner shall request 3
the group capital calculation from the Board of Governors of the Federal 4
Reserve System under an information sharing agreement, if applicable. 5
(c) If the Board of Governors of the Federal 6
Reserve System cannot share the group capital calculation with the lead state 7
commissioner, the insurance holding company system is not exempt from the 8
group capital calculation filing; 9
(iii) An insurance holding company system whose non -10
United States group-wide supervisor is located within a reciprocal 11
jurisdiction as described in § 23 -62-305 that recognizes the United States 12
state regulatory approach to group supervision and group capital; and 13
(iv) An insurance holding company: 14
(a) That provides information to the lead 15
state that meets the requirements for accreditation under the NAIC Financial 16
Regulation Standards and Accreditation Program, either directly or 17
indirectly, through the group -wide supervisor, who has determined the 18
information is satisfactory to allow the lead state to comply with the 19
National Association of Insurance Commissioners group supervision approach, 20
as detailed in the NAIC Financial Analysis Handbook; and 21
(b) Whose non-United States group-wide 22
supervisor that is not in a reciprocal jurisdiction recognizes and accepts, 23
as specified by the Insurance Commissioner by rule, the group capital 24
calculation as the world -wide group capital assessment for United States 25
insurance groups who operate in that jurisdiction. 26
(B) Notwithstanding subdivisions (n)(3)(A)(iii) and (iv) 27
of this section, a lead state commissioner shall require the group capital 28
calculation instructions for United States operations of any non -United 29
States based insurance holding company system when it is deemed appropriate 30
by the lead state commissioner for prudential oversight and solvency 31
monitoring purposes or for ensuring the competitiveness of the insurance 32
marketplace. 33
(4) Notwithstanding the exemptions from filing the group capital 34
calculations stated in subdivisions (n)(3)(A)(i) and (iv) of this section, 35
the lead state commissioner has the discretion to exempt the ultimate 36 SB236
9 02/14/2025 7:50:08 AM ANS131
controlling person from filing the annual group calculation or to accept a 1
limited group capital filing or report in accordance with criteria as 2
specified by the Insurance Commissioner by rule. 3
(5) If the lead state commissioner determines that an insurance 4
holding company system no longer meets one (1) or more of the requirements 5
for an exemption from filing the group capital calculation under subdivision 6
(n)(3) of this section, the insurance holding company system shall file the 7
group capital calculation at the next annual filing date unless given an 8
extension by the lead state commissioner. 9
(o)(1) Liquidity Stress Test. The ultimate controlling person of 10
every insurer subject to registration and scoped into the NAIC liquidity 11
stress test framework shall file the results of a specific year’s NAIC 12
liquidity stress test framework. 13
(2) The filing under subdivision (o)(1) of this section shall be 14
made to the lead state insurance commissioner of the insurance holding 15
company system, as determined by the procedures within the Financial Analysis 16
Handbook adopted by the National Association of Insurance Commissioners and 17
adopted by rule by the Insurance Commissioner. 18
(3)(A) The NAIC liquidity stress test framework includes scope 19
criteria that is applicable to a specific date year. 20
(B) The scope criteria is reviewed at least annually by 21
the NAIC Financial Stability E Task Force or its successor. 22
(C) Any change to the NAIC liquidity stress test framework 23
or to the data year for which the scope criteria are to be measured shall be 24
effective on January 1 of the year following the calendar year when the 25
changes are adopted. 26
(D) An insurer that meets at least one (1) threshold of 27
the scope criteria is considered scoped into the NAIC liquidity stress test 28
framework for the specified date year unless the lead state insurance 29
commissioner, in consultation with the NAIC Financial Stability E Task Force 30
or its successor, determines that the insurer should not be scoped into the 31
NAIC liquidity stress test framework for that data year. 32
(E) An insurer that does not trigger at least one (1) 33
threshold of the scope criteria is considered scoped out of the NAIC 34
liquidity stress test framework for the specified data year, unless the lead 35
state insurance commissioner, in consultation with the NAIC Financial 36 SB236
10 02/14/2025 7:50:08 AM ANS131
Stability E Task Force or its successor, determines the insurer should be 1
scoped into the NAIC liquidity stress test framework for that data year. 2
(4) The performance of, and filing of the results from, a 3
specific year’s NAIC liquidity stress test framework shall comply with: 4
(A) The NAIC liquidity stress test framework’s 5
instructions and reporting templates for that year; and 6
(B) Any lead state insurance commissioner determinations, 7
in consultation with the NAIC Financial Stability E Task Force or its 8
successor, provided within the NAIC liquidity stress test framework. 9
(p) Violations. The failure to file a registration statement, summary 10
of the registration statement, or enterprise risk filing required by this 11
section within the time specified is a violation of this section. 12
13
SECTION 7. Arkansas Code § 23 -63-515(a), concerning material 14
transactions by an insurer under the Insurance Holding Company Act, is 15
amended to read as follows: 16
(a)(1) Material transactions by insurers registered with the Insurance 17
Commissioner under § 23 -63-514 with their affiliates shall be subject to the 18
following standards: 19
(A) The terms shall be fair and reasonable; 20
(B) The books, accounts, and records of every party shall 21
be so maintained as to clearly and accurately disclose the precise nature and 22
details of the transactions, including such accounting information as is 23
necessary to support the reasonableness of the charges or fees to the 24
respective parties; 25
(C) The insurer's surplus as regards policyholders 26
following any dividends or distributions to shareholder affiliates shall be 27
reasonable in relation to the insurer's outstanding liabilities and adequate 28
to its financial needs; 29
(D) The charges or fees for services performed shall be 30
reasonable; 31
(E) The expenses incurred and payment received shall be 32
allocated to the insurer in conformity with customary insurance accounting 33
practices consistently applied; and 34
(F) The commissioner by rule may establish additional 35
requirements for a cost -sharing service agreement or a management agreement. 36 SB236
11 02/14/2025 7:50:08 AM ANS131
(G)(i) If an insurer subject to this subchapter is deemed 1
by the commissioner to be in a hazardous financial condition as defined by 2
rule or a condition that would be grounds for supervision, conservation, or a 3
delinquency proceeding, the commissioner may require the insurer to secure 4
and maintain either a deposit, held by the commissioner, or a bond, as 5
determined by the insurer, for the duration of the transaction or until the 6
condition no longer exists. 7
(ii) In determining whether or not a deposit or bond 8
is required, the commissioner may consider if concerns exist with respect to 9
the affiliate’s ability to fulfill the contract or agreement if the insurer 10
were to be put into liquidation. 11
(iii) Once the insurer is deemed to be in a 12
hazardous financial condition or a condition that would be grounds for 13
supervision, conservation, or a delinquency proceeding, and a deposit or bond 14
is necessary, the commissioner has discretion to determine the amount of the 15
deposit or bond, not to exceed the value of the transaction in any one (1) 16
year, and whether the deposit or bond should be required for each transaction 17
or only for transactions with specified persons. 18
(iv)(a) All records and data of an insurer held by 19
the insurer's affiliate shall remain the property of the insurer and be 20
subject to the insurer’s control. 21
(b) Insurer records shall be identifiable and 22
segregated or readily capable of segregation from all other records and data 23
at no cost to the insurer. 24
(v)(a)(1) Premiums or other funds belonging to an 25
insurer that are collected by or held by the insurer's affiliate are the 26
exclusive property of the insurer and are subject to the control of the 27
insurer. 28
(2) Any right of offset in the event an 29
insurer is placed into receivership shall be subject to § 23 -68-101 et seq. 30
(b) At the request of an insurer, the 31
insurer's affiliate shall provide that the receiver can obtain a complete set 32
of all records of any type that pertain to the insurer’s business, obtain 33
access to the servers on which the data is maintained, obtain the software 34
that runs those systems either through assumption of licensing agreements or 35
otherwise, and restrict the use of the data by the affiliate if it is not 36 SB236
12 02/14/2025 7:50:08 AM ANS131
operating the insurer’s business. 1
(c) The affiliate shall provide a waiver of 2
any landlord lien or other encumbrance to give the insurer access to all 3
records and data in the event of the affiliate’s default under a lease or 4
other agreement. 5
(2)(A) A domestic insurer subject to this subchapter and a 6
person in its holding company system may not enter into a transaction, as 7
described in subdivision (a)(2)(B) of this section, unless the insurer 8
notifies the commissioner in writing of its intention at least thirty (30) 9
days before, or less, as the commissioner may permit, and the commissioner 10
does not disapprove of the transaction within such a period. 11
(B) A transaction that requires prior notice to the 12
commissioner by a domestic insurer includes: 13
(i) Sales, purchases, exchanges, loans or extensions 14
of credit, guarantees, or investments, provided the transactions are equal to 15
or exceed as of December 31 next -preceding: 16
(a) With respect to nonlife insurers, the 17
lesser of three percent (3%) of the insurer's admitted assets or twenty -five 18
percent (25%) of surplus as regards policyholders; and 19
(b) With respect to life insurers, three 20
percent (3%) of the insurer's admitted assets; 21
(ii) Loans or extensions of credit to any person who 22
is not an affiliate when the insurer makes the loans or extensions of credit 23
with the agreement or understanding that the proceeds of the transactions, in 24
whole or in substantial part, are to be used to make loans or extensions of 25
credit to, to purchase assets of, or to make investments in any affiliate of 26
the insurer making the loans or extensions of credit, provided that the 27
transactions are equal to or exceed as of December 31 next -preceding: 28
(a) With respect to nonlife insurers, the 29
lesser of three percent (3%) of the insurer's admitted assets or twenty -five 30
percent (25%) of surplus as regards policyholders; and 31
(b) With respect to life insurers, three 32
percent (3%) of the insurer's admitted assets; 33
(iii) Reinsurance agreements or modifications 34
thereto, including: 35
(a) All reinsurance pooling agreements; and 36 SB236
13 02/14/2025 7:50:08 AM ANS131
(b) Agreements in which the reinsurance 1
premium, a change in the insurer's liabilities, any projected reinsurance 2
premium, or a change in the insurer's liabilities in any of the next three 3
(3) years equals or exceeds five percent (5%) of the insurer's surplus as 4
regards policyholders, as of December 31 next -preceding, including those 5
agreements that may require as consideration the transfer of assets from an 6
insurer to a nonaffiliate, if an agreement or understanding exists between 7
the insurer and nonaffiliate that any portion of the assets will be 8
transferred to one (1) or more affiliates of the insurer; 9
(iv) All management agreements, service contracts, 10
tax allocation agreements, and all cost -sharing arrangements; 11
(v) Any material transactions specified by 12
regulation that the commissioner determines may adversely affect the 13
interests of the insurer's policyholders; and 14
(vi)(a) Any amendment or modification of an 15
affiliate agreement that is subject to the materiality standards under 16
subdivision (a)(1) of this section, including the reason for the amendment or 17
modification and the financial impact on the domestic insurer. 18
(b) A domestic insurer shall notify the 19
commissioner within thirty (30) days after a termination of a previously 20
filed agreement in a format that is acceptable to the commissioner, to 21
determine if further reporting or filing is required. 22
(3) A domestic insurer subject to this subchapter may not enter 23
into transactions which are part of a plan or series of like transactions 24
with persons within the holding company system if the purpose of those 25
separate transactions is to avoid the threshold amount and thus avoid the 26
review that would otherwise occur. If the commissioner determines that those 27
separate transactions were entered into over any twelve -month period for such 28
a purpose, the commissioner may exercise his or her authority under § 23 -63-29
522. 30
(4) In reviewing transactions pursuant to subdivision (a)(2) of 31
this section, the commissioner shall consider whether the transactions comply 32
with the standards set forth in subdivision (a)(1) of this section and 33
whether they may adversely affect the interests of policyholders. 34
(5) The commissioner shall be notified within thirty (30) days 35
of any investment of a domestic insurer subject to this subchapter in any one 36 SB236
14 02/14/2025 7:50:08 AM ANS131
(1) corporation if the total investment in such a corporation by the 1
insurance holding company system exceeds ten percent (10%) of the 2
corporation's voting securities. 3
(6)(A) An affiliate that is a party to a contract with a 4
domestic insurer subject to subdivision (a)(2)(B)(iv) of this section is 5
subject to: 6
(i) The jurisdiction of any supervision, seizure, 7
conservatorship, or receivership proceedings against the insurer; and 8
(ii) The authority of any supervisor, conservator, 9
rehabilitator, or liquidator for the insurer appointed under § 23 -68-101 et 10
seq., for the purpose of interpreting, enforcing, and overseeing the 11
affiliate’s obligations. 12
(B) The affiliates' obligations under subdivision 13
(a)(6)(A)(ii) of this section include those that: 14
(i) Are an integral part of the insurer’s 15
operations, including without limitation management, administration, 16
accounting, data processing, marketing, underwriting, claims handling, 17
investment, or any other similar functions; or 18
(ii) Are essential to the insurer’s ability to 19
fulfill its obligations under insurance policies. 20
(C) The commissioner may require that a contract under 21
subdivision (a)(2)(B)(iv) of this section for the provisions of services 22
described in subdivisions (a)(6)(A)(i) and (ii) of this section specify that 23
the affiliate consents to the jurisdiction stated in subdivision (a)(6)(A) of 24
this section. 25
26
SECTION 8. Arkansas Code § 23 -63-517(a), concerning confidentiality 27
under the Insurance Holding Company Act, is amended to read as follows: 28
(a)(1) All information and documents obtained by or disclosed to the 29
Insurance Commissioner or any other person in the course of an examination or 30
investigation made under § 23 -63-516 and all information reported under §§ 31
23-63-514 and 23-63-515 shall be given confidential treatment and shall not 32
be subject to subpoena or discovery or admissible in evidence in any private 33
civil action or be made public by the commissioner under the Freedom of 34
Information Act of 1967, § 25 -19-101 et seq., or any other public records 35
law, or by the National Association of Insurance Commissioners. However, the 36 SB236
15 02/14/2025 7:50:08 AM ANS131
commissioner is authorized to use the documents, materials, or other 1
information in the furtherance of any regulatory or legal action brought as 2
part of the commissioner's duties. 3
(2)(A)(i) Information provided to the State Insurance Department 4
under § 23-63-514(n) shall be confidential with respect to the group capital 5
calculation, the group capital ratio produced within the calculation, and any 6
group capital information received from an insurance holding company 7
supervised by the Board of Governors of the Federal Reserve System or any 8
United States group-wide supervisor. 9
(ii) The commissioner may use the documents, 10
materials, or other information in the furtherance of any regulatory or legal 11
action brought as part of the commissioner’s duties. 12
(B)(i) Information provided to the department under § 23 -13
63-514(o) shall be confidential with respect to the results of the NAIC 14
liquidity stress test framework , supporting disclosures, and any liquidity 15
stress test information received from an insurance holding company supervised 16
by the Board of Governors of the Federal Reserve System and non-United States 17
group-wide supervisors. 18
(ii) The commissioner may use the documents, 19
materials, or other information in the furtherance of any regulatory or legal 20
action brought as part of the commissioner’s duties. 21
(3) The information, documents, and copies of the information 22
shall not be subject to subpoena or be made public without the prior written 23
consent of the insurer to which it pertains unless the commissioner, after 24
giving the insurer and any of the insurer's affiliates that may be affected 25
notice and an opportunity to be heard, determines that the interests of 26
policyholders, shareholders, or the public will be served by the publication 27
of the information. 28
(3)(4) In that event, the commissioner may publish any part of 29
the information in the manner the commissioner considers appropriate. 30
31
32
APPROVED: 3/12/25 33
34
35
36