Arkansas 2025 Regular Session

Arkansas Senate Bill SB481 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		Stricken language would be deleted from and underlined language would be added to present law.
2		-	Act 779 of the Regular Session
3	2		ANS286 03/17/2025 3:20:39 PM ANS286
4	3		State of Arkansas 1
5	4		95th General Assembly A Bill 2
6	5		Regular Session, 2025 SENATE BILL 481 3
7	6		4
8	7		By: Senators Gilmore, J. Boyd, J. Bryant, B. Davis, J. Dismang, Hester, Hill, Irvin, B. Johnson, J. Petty, 5
9	8		Rice, Stone 6
10	9		By: Representatives Wardlaw, Evans, M. Shepherd, Achor, F. Allen, Beaty Jr., Bentley, M. Brown, Joey 7
11	10		Carr, Cavenaugh, Cozart, Crawford, Dalby, Eaves, Eubanks, Gramlich, Hawk, Holcomb, Jean, Maddox, 8
12	11		McNair, Milligan, J. Moore, Painter, Pearce, Puryear, J. Richardson, Richmond, Steimel, Vaught, Walker, 9
13	12		Warren, D. Whitaker, Wing, Wooldridge, Wooten 10
14	13		11
15	14		For An Act To Be Entitled 12
16	15		AN ACT TO CREATE A MORE SUSTAINABLE SYSTEM OF 13
17	16		PROPERTY INSURANCE FOR PUBLIC SCHOOLS, STATE -14
18	17		SUPPORTED INSTITUTIONS OF HIGHER EDUCATION, AND 15
19	18		STATE-OWNED PROPERTY; TO CREATE THE OFFICE OF 16
20	19		PROPERTY RISK WITHIN THE DEPARTMENT OF TRANSFORMATION 17
21	20		AND SHARED SERVICES; TO AMEND THE PUBLIC ELEMENTARY 18
22	21		AND SECONDARY SCHOOL INSURANCE ACT; TO REVISE THE 19
23	22		EMPLOYEE BENEFITS DIVISION OVERSIGHT SUBCOMMITTEE; TO 20
24	23		AMEND THE ARKANSAS MULTI -AGENCY INSURANCE TRUST FUND 21
25	24		ACT; TO COMBINE PUBLIC ELEMENTARY AND SECONDARY 22
26	25		SCHOOLS WITH STATE-SUPPORTED INSTITUTIONS OF HIGHER 23
27	26		EDUCATION AND STATE-OWNED PROPERTY UNDER A SINGLE 24
28	27		PROGRAM TO ENSURE PROPER VALUATION FOR PROPERTY 25
29	28		INSURANCE PURPOSES; TO CREATE THE STATE CAPTIVE 26
30	29		INSURANCE PROGRAM ACT; TO PROHIBIT THE USE OF PUBLIC 27
31	30		ADJUSTING IN PROPERTY INSURANCE CLAIMS; TO ALLOW FOR 28
32	31		THE CREATION OF A CAPTIVE INSURANCE COMPANY BY THE 29
33	32		STATE OF ARKANSAS; TO DECLARE AN EMERGENCY; AND FOR 30
34	33		OTHER PURPOSES. 31
35	34		32
36	35		33
37	36		Subtitle 34
38	37		TO CREATE A MORE SUSTAINABLE SYSTEM OF 35
39	38		PROPERTY INSURANCE FOR PUBLIC SCHOOLS, 36 SB481
40	39
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42	41		STATE-SUPPORTED INSTITUTIONS OF HIGHER 1
43	42		EDUCATION, AND STATE -OWNED PROPERTY; AND 2
44	43		TO DECLARE AN EMERGENCY. 3
45	44		4
46	45		BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 5
47	46		6
48	47		SECTION 1. DO NOT CODIFY. Cooperation by state entities with State 7
49	48		Captive Insurance Program. 8
50	49		The Insurance Commissioner, the State Insurance Department, the 9
51	50		Director of the Risk Management Division, the Secretary of the Department of 10
52	51		Transformation and Shared Services, the Division of Higher Education, the 11
53	52		Commission for Arkansas Public School Academic Facilities and Transportation, 12
54	53		the Department of Education, and the State Board of Finance shall cooperate 13
55	54		with the State Captive Insurance Program and coordinate to ensure proper and 14
56	55		effective coverage requirements and guidelines for all buildings, structures, 15
57	56		facilities, and business personal property owned by a public school, a state -16
58	57		supported institution of higher education, or the state for the benefit of 17
59	58		the State Captive Insurance Program. 18
60	59		19
61	60		SECTION 2. DO NOT CODIFY. Transitional provisions for property 20
62	61		insurance programs transferring to State Captive Insurance Program — Transfer 21
63	62		of property insurance programs administered by Director of Risk Management 22
64	63		Division. 23
65	64		(a) The property insurance programs administered by the Director of 24
66	65		the Risk Management Division are transferred to the Department of 25
67	66		Transformation and Shared Services, and the programs' authority, duties, 26
68	67		functions, records, contracts, personnel, property, and unexpended balances 27
69	68		of appropriations, allocations, and other funds, including without limitation 28
70	69		the functions of budgeting or purchasing, are transferred to the State 29
71	70		Captive Insurance Program as it relates to the property insurance programs 30
72	71		only. 31
73	72		(b)(1) The Director of the Risk Management Division and the State 32
74	73		Insurance Department may continue to carry out the functions of the property 33
75	74		insurance programs until such time that the transfer of the property 34
76	75		insurance programs of the Department of Commerce - Division of Insurance - 35
77	76		Arkansas Multi-Agency Insurance Trust established under the Arkansas Multi -36 SB481
78	77
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80	79		Agency Insurance Trust Fund Act, § 25 -35-101 et seq. and the Public School 1
81	80		Insurance Trust Fund established under the Public Elementary and Secondary 2
82	81		School Insurance Act, § 6 -20-1501 et seq., from the State Insurance 3
83	82		Department to the Department of Transformation and Shared Services is 4
84	83		complete or November 30, 2025, whichever is earlier. 5
85	84		(2) The Secretary of the Department of Transformation and Shared 6
86	85		Services may extend the date by rule only for purposes of adjustment and 7
87	86		payment of claims, as set out in Section 26 of this act. 8
88	87		(c) The Insurance Commissioner and the Director of the Risk Management 9
89	88		Division shall cooperate with the State Captive Insurance Program to ensure 10
90	89		an efficient and timely transition of operations once the State Captive 11
91	90		Insurance Program begins operations to provide coverage for all buildings, 12
92	91		structures, facilities, and business personal property owned by a public 13
93	92		school, a state-supported institution of higher education, or the state for 14
94	93		the benefit of the State Captive Insurance Program. 15
95	94		16
96	95		SECTION 3. DO NOT CODIFY. Legislative findings and intent. 17
97	96		(a) The General Assembly finds that: 18
98	97		(1) The property insurance programs for public schools, state -19
99	98		supported institutions of higher education, and state -owned properties are in 20
100	99		a state of crisis; 21
101	100		(2) In 2023, the General Assembly authorized supplemental 22
102	101		funding to send to public schools for the purpose of offsetting premium 23
103	102		increases for public schools without implementing long -term systemic and 24
104	103		structural reforms; 25
105	104		(3) In addition to the need for short -term action by the General 26
106	105		Assembly to avert the impending premium increases for public schools, the 27
107	106		General Assembly must take an active role in crafting a long -term solution to 28
108	107		ensure the stability of the property insurance programs for public schools, 29
109	108		state-supported institutions of higher education, and state -owned properties; 30
110	109		(4) Significant market adjustments in response to natural 31
111	110		disasters in this state and in this country have resulted in the need for the 32
112	111		General Assembly to restructure and combine the property insurance programs 33
113	112		for public schools, state -supported institutions of higher education, and 34
114	113		state-owned properties under the State Captive Insurance Program created by 35
115	114		this act and to inject additional money into the State Captive Insurance 36 SB481
116	115
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118	117		Program to maintain the integrity of the State Captive Insurance Program by 1
119	118		offsetting premium increases for public schools, state -supported institutions 2
120	119		of higher education, and state -owned properties; 3
121	120		(5) The use of public adjusting by certain public schools has 4
122	121		caused an increase in property insurance premiums and a lack of viable 5
123	122		options on the insurance market for future years; 6
124	123		(6) Properties of state -supported institutions of higher 7
125	124		education have historically been undervalued, and including state -supported 8
126	125		institutions of higher education in the State Captive Insurance Program will 9
127	126		provide more attractive options for the State Captive Insurance Program on 10
128	127		the insurance market; 11
129	128		(7) Properties of state -supported institutions of higher 12
130	129		education will need to be reappraised by independent adjusters under the 13
131	130		State Captive Insurance Program to ensure proper valuation of properties; 14
132	131		(8) The continual evaluation of the State Captive Insurance 15
133	132		Program by the General Assembly is critical for: 16
134	133		(A) Maximizing the benefits to public schools, state -17
135	134		supported institutions of higher education, and the state that are 18
136	135		participants in the State Captive Insurance Program; and 19
137	136		(B) Maintaining the continued viability of the State 20
138	137		Captive Insurance Program; and 21
139	138		(9) Accountability and transparency in the operation of the 22
140	139		State Captive Insurance Program are vital to a proper evaluation of the State 23
141	140		Captive Insurance Program. 24
142	141		(b) It is the intent of the General Assembly that: 25
143	142		(1) The property insurance programs for public schools, state -26
144	143		supported institutions of higher education, and state -owned property are 27
145	144		restructured and combined for public schools, state -supported institutions of 28
146	145		higher education, and state -owned property under the State Captive Insurance 29
147	146		Program; 30
148	147		(2) Additional money shall be injected into the State Captive 31
149	148		Insurance Program to maintain the integrity of the State Captive Insurance 32
150	149		Program by managing risks for public schools, state -supported institutions of 33
151	150		higher education, and the state; 34
152	151		(3) Any additional funding provided for public schools or state -35
153	152		supported institutions of higher education for purposes of property insurance 36 SB481
154	153
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156	155		during the Regular Session of the 95th General Assembly be considered a one -1
157	156		time infusion of money, not a permanent funding source; 2
158	157		(4) Funding will be calculated under the State Captive Insurance 3
159	158		Program with meaningful reforms that restore permanent stability and 4
160	159		actuarial soundness; 5
161	160		(5) The use of public adjusting is prohibited by public schools 6
162	161		and state-supported institutions of higher education under the State Captive 7
163	162		Insurance Program; and 8
164	163		(6) The Insurance Commissioner, the State Insurance Department, 9
165	164		the Director of the Risk Management Division, the Secretary of the Department 10
166	165		of Transformation and Shared Services, the Division of Higher Education, the 11
167	166		Commission for Arkansas Public School Academic Facilities and Transportation, 12
168	167		the Department of Education, and the State Board of Finance shall coordinate 13
169	168		to ensure proper and effective coverage requirements and guidelines for all 14
170	169		buildings, structures, facilities, and business personal property owned by a 15
171	170		public school, state -supported institution of higher education, or the state 16
172	171		for the benefit of the State Captive Insurance Program. 17
173	172		(c) The General Assembly intends this transfer to streamline the 18
174	173		delivery of property insurance coverage for all state -owned buildings, public 19
175	174		schools and state-supported institutions of higher education to promote 20
176	175		stability and fiduciary soundness for all structures covered and potential 21
177	176		claims. 22
178	177		(d)(1) The property insurance programs of the Department of Commerce - 23
179	178		Division of Insurance - Arkansas Multi-Agency Insurance Trust established 24
180	179		under the Arkansas Multi -Agency Insurance Trust Fund Act, § 25 -35-101 et seq. 25
181	180		and the Public School Insurance Trust Fund established under the Public 26
182	181		Elementary and Secondary School Insurance Act, § 6 -20-1501 et seq., shall be 27
183	182		transferred by cabinet -level department transfer under § 25 -43-101 et seq., 28
184	183		from the Department of Commerce to the Department of Transformation and 29
185	184		Shared Services no later than December 1, 2025, to provide for the operation 30
186	185		of the State Captive Insurance Program. 31
187	186		(2) The Department of Commerce and the Department of 32
188	187		Transformation and Shared Services shall coordinate the transfer to coincide 33
189	188		with the start date of the State Captive Insurance Program established under 34
190	189		§ 25-44-103. 35
191	190		(e) The transfer of the statutory authority, powers, duties, 36 SB481
192	191
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194	193		functions, records, personnel, property, contracts, and unexpended balances 1
195	194		of appropriations, allocations, or other funds shall begin at the direction 2
196	195		of the Chief Fiscal Officer of the State in cooperation with the Secretary of 3
197	196		the Department of Commerce and the Secretary of the Department of 4
198	197		Transformation and Shared Services on July 1, 2025, and shall be fully 5
199	198		complete by December 1, 2026, for the establishment of the State Captive 6
200	199		Insurance Program. 7
201	200		(f) The orders, rules, regulations, directives, or standards in this 8
202	201		section shall continue with full force and effect until amended or repealed 9
203	202		under authority given by law. 10
204	203		(g) The Department of Commerce shall grant access to and provide all 11
205	204		information requested by the Department of Transformation and Shared Services 12
206	205		to accomplish the transfer of the property insurance coverage from the 13
207	206		Arkansas Multi-Agency Insurance Trust Fund and the Public School Insurance 14
208	207		Trust Fund and the missions of these programs to the new State Captive 15
209	208		Insurance Program. 16
210	209		17
211	210		SECTION 4. Arkansas Code § 6 -20-1503 is amended to read as follows: 18
212	211		6-20-1503. State Insurance Department — Powers and duties regarding 19
213	212		cybersecurity risks insurance for public elementary and secondary schools. 20
214	213		It shall be the power and duty of the State Insurance Department to: 21
215	214		(1) Adopt such rules as may be necessary to provide for the 22
216	215		insuring of public elementary and secondary school, education service 23
217	216		cooperative, and open -enrollment public charter school property cybersecurity 24
218	217		risks insurance within the State of Arkansas; 25
219	218		(2) Administer the Public School Insurance Trust Fund; 26
220	219		(3) Delegate responsibilities in connection with the 27
221	220		administration of this subchapter to the Director of the Risk Management 28
222	221		Division and the staff of the department; 29
223	222		(4)(A) Establish and administer a program of insurance to cover 30
224	223		buildings and contents cybersecurity risks insurance of public school 31
225	224		districts, education service cooperatives, and open -enrollment public charter 32
226	225		schools of this state that have elected to participate in a multischool 33
227	226		insurance program. 34
228	227		(B) The programs program shall be in accordance with 35
229	228		recognized and established insurance practices; 36 SB481
230	229
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232	231		(5) Establish, and from time to time modify, the premium rates 1
233	232		to be charged for the various risks; 2
234	233		(6) Specify the form for insurance policies and other forms 3
235	234		required for the purposes of this subchapter; 4
236	235		(7)(A) Purchase insurance in compliance with all state 5
237	236		purchasing laws from insurance companies authorized to do business in this 6
238	237		state in keeping with recognized principles of good risk management. 7
239	238		(B) The director shall prescribe, from time to time, rules 8
240	239		for placing and handling the insurance; 9
241	240		(8) Employ necessary adjusters, engineers, appraisers, and other 10
242	241		personnel required in the administration of this subchapter; 11
243	242		(9) Engage in a program of prevention loss control to assist the 12
244	243		various public schools in improving and minimizing potential insurance 13
245	244		losses; 14
246	245		(10)(9) Perform all additional powers and duties necessary to 15
247	246		maintain sound insurance underwriting practices recognized by good risk 16
248	247		management; 17
249	248		(11)(10) Periodically review the status of the fund and the 18
250	249		adequacy of insurance premium rates and compare these rates with rates for 19
251	250		comparable risks for private insurance companies; 20
252	251		(12)(11) Confer with superintendents and boards of directors of 21
253	252		school districts, the governing boards of education service cooperatives, and 22
254	253		open-enrollment public charter schools concerning insurance practices of the 23
255	254		various school districts, education service cooperatives, and open -enrollment 24
256	255		public charter schools; 25
257	256		(13)(12) Promulgate rules for the administration of the state 26
258	257		public school cybersecurity risks insurance program; and 27
259	258		(14)(13) Perform other duties that will expedite the operation 28
260	259		of the Public Elementary and Secondary School Insurance Program. 29
261	260		30
262	261		SECTION 5. Arkansas Code § 6 -20-1505 is amended to read as follows: 31
263	262		6-20-1505. Information to be furnished. 32
264	263		(a) The Director of the Risk Management Division of the State 33
265	264		Insurance Department, with the approval of the Insurance Commissioner, shall 34
266	265		require school district superintendents, county school supervisors, clerks, 35
267	266		or governing boards of the education service cooperatives or open -enrollment 36 SB481
268	267
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270	269		public charter schools to furnish the State Insurance Department a complete 1
271	270		list showing the location of every school building sixty (60) days before 2
272	271		entering the program and upon written request by the department. 3
273	272		(b) The department State Insurance Department shall have authority to 4
274	273		require each school district, education service cooperative, or open -5
275	274		enrollment public charter school to furnish a complete report of its 6
276	275		cybersecurity risks insurance program, including the expiration dates of its 7
277	276		contracts, a history of losses, or any additional information required by the 8
278	277		insurer. 9
279	278		10
280	279		SECTION 6. Arkansas Code § 6 -20-1506 is amended to read as follows: 11
281	280		6-20-1506. Finding of uninsurability — Effect. 12
282	281		(a)(1) The State Insurance Department is authorized to maintain an 13
283	282		inspection and engineering service and a training program designed to reduce 14
284	283		the hazards in public school buildings insured under this program. 15
285	284		(2) The department shall have authority to cancel or not renew 16
286	285		insurance on any school property if the property is deemed no longer 17
287	286		insurable. 18
288	287		(3) The department may refuse to insure property insured for 19
289	288		cybersecurity risks when it determines that the property does not meet 20
290	289		program guidelines for cybersecurity risks insurance coverage . 21
291	290		(b) In carrying out its duties pursuant to this section, the The 22
292	291		department may request and the affected school district shall provide any 23
293	292		information requested for a determination concerning the reasons for the a 24
294	293		denial, nonrenewal, or cancellation of cybersecurity risks insurance 25
295	294		coverage. 26
296	295		27
297	296		SECTION 7. Arkansas Code § 6 -20-1508 is amended to read as follows: 28
298	297		6-20-1508. Appraisal and payment Payment of losses. 29
299	298		(a) In the event of loss of a school district, education service 30
300	299		cooperative, or open -enrollment public charter school property under the 31
301	300		Public Elementary and Secondary School Insurance Program, the Public School 32
302	301		Insurance Trust Fund shall pay the loss as specified in the contract. 33
303	302		(b) When an agreement as to the extent of loss or damage cannot be 34
304	303		reached between the State Insurance Department and officials having charge of 35
305	304		the property, the amount of the loss or damage shall be determined by three 36 SB481
306	305
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308	307		(3) appraisers, one (1) to be named by the department, one (1) by the school 1
309	308		district, education service cooperative, or open -enrollment public charter 2
310	309		school governing board, and a third to be selected by the two (2) appointed 3
311	310		appraisers, all of whom shall be disinterested persons and qualified from 4
312	311		experience to appraise and value such property. 5
313	312		(c) If a third appraiser is not agreed upon within thirty (30) days, 6
314	313		the Insurance Commissioner shall have authority to appoint a third appraiser. 7
315	314		(d) It shall be the duty of the department to coordinate, facilitate, 8
316	315		and expedite details in connection with responsibilities outlined in this 9
317	316		section. 10
318	317		(e) The department is granted authority to contract for services with 11
319	318		licensed real estate brokers in order to expedite and facilitate the proper 12
320	319		operation of the program. 13
321	320		14
322	321		SECTION 8. Arkansas Code § 6 -20-1513 is repealed. 15
323	322		6-20-1513. Bond obligations. 16
324	323		(a) The State Insurance Department is authorized and directed to meet 17
325	324		legal requirements with reference to coverage on buildings as a result of 18
326	325		school district, education service cooperative, or open -enrollment public 19
327	326		charter school bond obligations. 20
328	327		(b) The specific intent of this section is to ensure that policies 21
329	328		issued by the Public Elementary and Secondary School Insurance Program 22
330	329		include provisions required by existing school district bond contracts. 23
331	330		24
332	331		SECTION 9. Arkansas Code § 6 -21-114(d) and (e), concerning authorized 25
333	332		and required actions of the Commission for Arkansas Public School Academic 26
334	333		Facilities and Transportation, is amended to read as follows: 27
335	334		(d) The commission shall: 28
336	335		(1) Oversee the operations of the Division of Public School 29
337	336		Academic Facilities and Transportation; 30
338	337		(2)(A) Promulgate rules in consultation with the Insurance 31
339	338		Commissioner Department of Transformation and Shared Services to establish 32
340	339		property, boiler and machinery, and extended coverage insurance requirements 33
341	340		and guidelines for all buildings, structures, facilities, and business 34
342	341		personal property owned by a school district. 35
343	342		(B) The rules promulgated by the commission under 36 SB481
344	343
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346	345		subdivision (d)(2)(A) of this section shall: 1
347	346		(i) Attempt to provide the most cost -efficient 2
348	347		manner for protecting each school district from loss of or damage to the 3
349	348		school district's buildings, structures, facilities, and business personal 4
350	349		property; 5
351	350		(ii) Require property, boiler and machinery, and 6
352	351		extended coverage insurers to have a minimum A.M. Best rating; 7
353	352		(iii) Establish bidding requirements and procedures, 8
354	353		if applicable to any insurance coverage; and 9
355	354		(iv)(a)(iii)(a) Be binding upon each school district 10
356	355		for any placement or renewal of insurance coverage after June 1, 2007. 11
357	356		(b) The state's financial participation under 12
358	357		the Academic Facilities Partnership Program provided by § 6 -20-2507 or the 13
359	358		Academic Facilities Catastrophic Program provided by § 6 -20-2508 may be 14
360	359		withheld or reduced by the commission if a school district does not comply 15
361	360		with the rules promulgated under subdivision (d)(2)(A) of this section; and 16
362	361		(iv) Require a public school district to be insured 17
363	362		under the State Captive Insurance Program with respect to insurance coverage 18
364	363		of the buildings, structures, facilities, and business personal property 19
365	364		owned by the public school district in order to be eligible for the state's 20
366	365		financial participation under the Academic Facilities Partnership Program 21
367	366		under § 6-20-2507 and the Academic Facilities Catastrophic Program under § 6 -22
368	367		20-2508; and 23
369	368		(3) Appoint all members of the Advisory Committee on Public 24
370	369		School Academic Facilities. 25
371	370		(e) The commission may: 26
372	371		(1) Perform any act and provide for the performance of any 27
373	372		function necessary or desirable to carry out the purposes of the Arkansas 28
374	373		Public School Academic Facilities Program and any other related program; 29
375	374		(2)(A) Adopt, amend, and rescind rules as necessary or desirable 30
376	375		for the administration of the Arkansas Public School Academic Facilities 31
377	376		Program and any other related program. 32
378	377		(B) The commission shall report to the Administrative 33
379	378		Rules Subcommittee of the Legislative Council in a manner consistent with § 34
380	379		10-3-309 on the adoption, amendment, rescission, or repeal of any proposed 35
381	380		rule related to the administration of the Arkansas Public School Academic 36 SB481
382	381
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384	383		Facilities Funding Act, § 6 -20-2501 et seq., the Arkansas Public School 1
385	384		Academic Facilities Program Act, § 6 -21-801 et seq., or any other related 2
386	385		program; 3
387	386		(3) Contract with, retain the services of, or designate and fix 4
388	387		the compensation of consultants, advisors, architects, engineers, and other 5
389	388		independent contractors as may be necessary or desirable to carry out the 6
390	389		Arkansas Public School Academic Facilities Program or any related program; 7
391	390		and 8
392	391		(4) Study and promulgate rules in consultation with the 9
393	392		department concerning: 10
394	393		(A) The propriety and feasibility of requiring that each 11
395	394		school district maintain insurance coverage against loss due to : 12
396	395		(i) Earth earth movement; or 13
397	396		(ii) The operation of a school district's motor 14
398	397		vehicles and buses; and 15
399	398		(B) The appropriate amount of insurance coverage under 16
400	399		this subdivision (e)(4) ; and 17
401	400		(5) Study and promulgate rules in consultation with the 18
402	401		Insurance Commissioner concerning: 19
403	402		(A) The propriety and feasibility of requiring that each 20
404	403		school district maintain insurance coverage against loss due to the operation 21
405	404		of a school district's motor vehicles and buses; and 22
406	405		(B) The appropriate amount of insurance coverage under 23
407	406		this subdivision (e)(5) . 24
408	407		25
409	408		SECTION 10. Arkansas Code § 6 -21-806 is amended to read as follows: 26
410	409		6-21-806. Academic Facilities Master Plan Program — School districts. 27
411	410		(a) The Academic Facilities Master Plan Program shall require each 28
412	411		school district to: 29
413	412		(1) Develop a six-year districtwide facilities master plan that 30
414	413		shall be approved by the school district's board of directors for submission 31
415	414		to and approval by the Division of Public School Academic Facilities and 32
416	415		Transportation and the Department of Transformation and Shared Services ; 33
417	416		(2) Base its facilities master plan on the provisions: 34
418	417		(A) Provisions of the Arkansas Public School Academic 35
419	418		Facility Manual as adopted by the Commission for Arkansas Public School 36 SB481
420	419
421	420		12 03/17/2025 3:20:39 PM ANS286
422	421		Academic Facilities and Transportation , on priorities; 1
423	422		(B) Priorities indicated by statewide assessment , on 2
424	423		priorities; 3
425	424		(C) Priorities established by the division statewide 4
426	425		facility needs priority list , and on other; 5
427	426		(D) Rules promulgated by the department as they relate to 6
428	427		requirements associated with public school district schedules for 7
429	428		maintenance, repair, and renovation activities in public school academic and 8
430	429		nonacademic facilities; and 9
431	430		(E) Other pertinent data specific to the needs of the 10
432	431		school district with regard to academic facilities and equipment; 11
433	432		(3) Present a draft of the school district's facilities master 12
434	433		plan in a public hearing in the same locality as the school district and take 13
435	434		public comments; 14
436	435		(4) Submit evidence of the school district's insurance coverage 15
437	436		to the division and the department, including coverage amounts, types of 16
438	437		coverage, identification of buildings covered, policy renewal dates, and all 17
439	438		riders; 18
440	439		(5) Submit the school district's facilities master plan with a 19
441	440		summary of comments made at public hearing to the division and the department 20
442	441		by February 1 of each even -numbered year; 21
443	442		(6) Submit a report to the division and the department by 22
444	443		February 1 of each odd -numbered year that includes a description of all 23
445	444		projects completed in the school district since the submission of the school 24
446	445		district's most recent facilities master plan, the school district's current 25
447	446		enrollment projections, new or continuing needs of the school district with 26
448	447		regard to academic facilities and equipment, and an accounting of any changes 27
449	448		in the school district's insurance coverage from the most recent submission; 28
450	449		and 29
451	450		(7)(A) Submit a report to the division and the department by 30
452	451		February 1 of each year that identifies: 31
453	452		(i) All unused or underutilized public school 32
454	453		facilities in the school district; and 33
455	454		(ii) The unused or underutilized public school 34
456	455		facilities, if any, that are designated in the district's facilities master 35
457	456		plan to be reused, renovated, or demolished as part of a specific committed 36 SB481
458	457
459	458		13 03/17/2025 3:20:39 PM ANS286
460	459		project or planned new construction project. 1
461	460		(B)(i) The division shall identify a public school 2
462	461		facility or other real property as an unused or underutilized public school 3
463	462		facility if the school district fails to identify in the report the public 4
464	463		school facility or other real property. 5
465	464		(ii) A school district may appeal an identification 6
466	465		made by the division under subdivision (a)(7)(B)(i) of this section to the 7
467	466		commission. 8
468	467		(b) A facilities master plan shall include, at a minimum, the 9
469	468		following: 10
470	469		(1) A schedule of custodial activities for each public school 11
471	470		facility used by a school district; 12
472	471		(2)(A) A schedule of maintenance, repair, and renovation 13
473	472		activities for each public school facility used by a school district , that 14
474	473		shall be based on the rules promulgated by the department . 15
475	474		(B) The schedule shall distinguish between work associated 16
476	475		with academic facilities and work associated with nonacademic public school 17
477	476		facilities; 18
478	477		(3)(A) Documentation that describes preventive maintenance work 19
479	478		for each public school facility as required by rules promulgated by the 20
480	479		department and identifies the completion date of the work. 21
481	480		(B) The documentation shall distinguish between preventive 22
482	481		maintenance work associated with academic facilities and preventive 23
483	482		maintenance work associated with nonacademic public school facilities; 24
484	483		(4)(A) Annual expenditures of the school district for all 25
485	484		custodial, maintenance, repair, and renovation activities in the school 26
486	485		district. 27
487	486		(B) The section of the facilities master plan pertaining 28
488	487		to the annual expenditures under subdivision (b)(4)(A) of this section shall 29
489	488		distinguish between expenditures associated with academic facilities and 30
490	489		expenditures associated with nonacademic public school facilities; 31
491	490		(5) A projected replacement schedule for major building systems 32
492	491		in each public school facility , that shall be based on the rules promulgated 33
493	492		by the department; 34
494	493		(6) Identification of issues with regard to public school 35
495	494		facility and program access to individuals with disabilities and, if 36 SB481
496	495
497	496		14 03/17/2025 3:20:39 PM ANS286
498	497		necessary, proposed methods for improving access; 1
499	498		(7)(A) Identification of committed projects within the school 2
500	499		district that includes, as applicable, a breakdown of the portion of each 3
501	500		project into maintenance, repair, and renovation activities and new 4
502	501		construction activities , that shall be based on the rules promulgated by the 5
503	502		department. 6
504	503		(B) The portion of a committed project pertaining to 7
505	504		maintenance, repair, and renovation activities shall identify, as applicable, 8
506	505		maintenance, repair, and renovation activities associated with academic 9
507	506		facilities and maintenance, repair, and renovation activities associated with 10
508	507		nonacademic public school facilities; 11
509	508		(8) Annual expenditures of the school district for capital 12
510	509		outlay; 13
511	510		(9) A description of planned new construction projects with cost 14
512	511		estimates for each public school facility within the school district and 15
513	512		needs prioritized as follows: 16
514	513		(A) Immediate needs that the school district intends to 17
515	514		address within three (3) years following the submission of the facilities 18
516	515		master plan; and 19
517	516		(B) Long-term needs that the school district intends to 20
518	517		address within the four (4) to six (6) years following the submission of the 21
519	518		facilities master plan; 22
520	519		(10) Evidence of the school district's insurance coverage, 23
521	520		including coverage amounts, types of coverage, identification of public 24
522	521		school facilities covered, policy renewal dates, and all riders; and 25
523	522		(11) An update in a format prescribed by the division of any new 26
524	523		public school facilities, as defined in § 6 -21-803, constructed since the 27
525	524		last master plan submission, including individual room types and sizes. 28
526	525		(c) A consultation meeting between representatives of the school 29
527	526		district and members of the division and the department to discuss the 30
528	527		development of the school district's facilities master plan shall be held 31
529	528		upon request of the school district. 32
530	529		(d) The division and the department shall review and upon all 33
531	530		requirements' requirements being met approve a school district's facilities 34
532	531		master plan no later than September 1 of each even -numbered year and shall 35
533	532		notify a school district no later than May 1 of each odd -numbered year 36 SB481
534	533
535	534		15 03/17/2025 3:20:39 PM ANS286
536	535		whether the school district's application for state financial participation 1
537	536		during the upcoming biennium in an eligible new construction project has been 2
538	537		approved. 3
539	538		(e)(1) A school district may amend its facilities master plans at any 4
540	539		time during the six-year cycle specified in § 6 -21-803. 5
541	540		(2) An amendment may be submitted to the division and the 6
542	541		department out of the regular even -numbered year cycle if the school 7
543	542		district: 8
544	543		(A) Has encountered: 9
545	544		(i) A major enrollment change; 10
546	545		(ii) A major curriculum change; 11
547	546		(iii) A major disaster; or 12
548	547		(iv) An unforeseen occurrence; or 13
549	548		(B)(i) Has begun or completed a self-funded construction 14
550	549		project over which the division has only review authority. 15
551	550		(ii) An amendment submitted under subdivision 16
552	551		(e)(2)(B)(i) of this section may be submitted in the form of an appendix to 17
553	552		the existing school district facilities master plan. 18
554	553		(f) In addition to the rules promulgated by the commission as required 19
555	554		by § 6-21-804, the department, in consultation with the division, shall 20
556	555		promulgate rules regarding the following without limitation: 21
557	556		(1) The requirements associated with public school district 22
558	557		schedules for maintenance, repair, and renovation activities in public school 23
559	558		academic and nonacademic facilities, that shall be included in the Public 24
560	559		School Facilities Custodial, Maintenance, Repair, and Renovation Manual 25
561	560		required by § 6-21-808; 26
562	561		(2) Insurance coverage requirements, including without 27
563	562		limitation: 28
564	563		(A) Insurance coverage amounts; and 29
565	564		(B) Types of insurance coverage; 30
566	565		(3) Preventive maintenance work requirements for each public 31
567	566		school academic and nonacademic facility; 32
568	567		(4) Projected replacement schedule requirements for major 33
569	568		building systems in each public school academic and nonacademic facility; and 34
570	569		(5) A depreciation schedule for roofs and heating, ventilation, 35
571	570		and air conditioning systems. 36 SB481
572	571
573	572		16 03/17/2025 3:20:39 PM ANS286
574	573		1
575	574		SECTION 11. Arkansas Code § 10 -3-320 is amended to read as follows: 2
576	575		10-3-320. Employee Benefits Division State Insurance Programs 3
577	576		Oversight Subcommittee — Definition. 4
578	577		(a) The Legislative Council shall establish by rule the Employee 5
579	578		Benefits Division State Insurance Programs Oversight Subcommittee, which 6
580	579		shall have oversight of all decisions of the State Board of Finance related 7
581	580		to the State and Public School Life and Health Insurance Program and the 8
582	581		State Captive Insurance Program . 9
583	582		(b) The following decisions of the board pertaining to the program 10
584	583		State and Public School Life and Health Insurance Program or the State 11
585	584		Captive Insurance Program shall be referred to the Employee Benefits Division 12
586	585		State Insurance Programs Oversight Subcommittee: 13
587	586		(1)(A) A new or significantly modified cost -containment measure. 14
588	587		(B) As used in this subdivision (b)(1), “cost -containment 15
589	588		measure” means a process or practice of controlling and managing expenses of 16
590	589		the program State and Public School Life and Health Insurance Program or the 17
591	590		State Captive Insurance Program by reducing or limiting the amount of 18
592	591		spending required to administer the program State and Public School Life and 19
593	592		Health Insurance Program or the State Captive Insurance Program and remain 20
594	593		within specific, preplanned budgetary constraints; 21
595	594		(2) Any change in plan options offered under the : 22
596	595		(A) program State and Public School Life and Health 23
597	596		Insurance Program for state employees or public school employees ; or 24
598	597		(B) State Captive Insurance Program for property owned by 25
599	598		public schools, state -supported institutions of higher education, or the 26
600	599		state; 27
601	600		(3) Potential funding changes to the program State and Public 28
602	601		School Life and Health Insurance Program or the State Captive Insurance 29
603	602		Program; 30
604	603		(4) Any premium increases or decreases over the previous plan 31
605	604		year; 32
606	605		(5) Any concern involving the reserve balance for state 33
607	606		employees or public school employees the State and Public School Life and 34
608	607		Health Insurance Program or the State Captive Insurance Program ; 35
609	608		(6) Changes to the four -year projections for the program State 36 SB481
610	609
611	610		17 03/17/2025 3:20:39 PM ANS286
612	611		and Public School Life and Health Insurance Program or the State Captive 1
613	612		Insurance Program; 2
614	613		(7) Changes that would limit, eliminate, or increase benefits of 3
615	614		plan options offered under the program State and Public School Life and 4
616	615		Health Insurance Program or the State Captive Insurance Program and the 5
617	616		effect these changes would have on the fiscal viability of the program State 6
618	617		and Public School Life and Health Insurance Program or the State Captive 7
619	618		Insurance Program, including the reserve balance for state employees or 8
620	619		public school employees the State and Public School Life and Health Insurance 9
621	620		Program or the State Captive Insurance Program ; 10
622	621		(8) Changes that would limit, eliminate, or increase eligibility 11
623	622		requirements for the program State and Public School Life and Health 12
624	623		Insurance Program or the State Captive Insurance Program ; 13
625	624		(9) Vendor issues or changes in vendors from the previous plan 14
626	625		year; 15
627	626		(10) Proposed contracts or changes in contracts from the 16
628	627		previous plan year; 17
629	628		(11) Any change in consultants from the previous plan year; 18
630	629		(12) Rules promulgated by the board , or by the Employee Benefits 19
631	630		Division, or by the Secretary of the Department of Transformation and Shared 20
632	631		Services regarding the implementation, administration, or enforcement of the 21
633	632		program State and Public School Life and Health Insurance Program or the 22
634	633		State Captive Insurance Program ; and 23
635	634		(13) Such other matters related to the program State and Public 24
636	635		School Life and Health Insurance Program or the State Captive Insurance 25
637	636		Program as the Employee Benefits Division State Insurance Programs Oversight 26
638	637		Subcommittee considers necessary to perform its oversight of all matters 27
639	638		related to the program State and Public School Life and Health Insurance 28
640	639		Program or the State Captive Insurance Program . 29
641	640		(c)(1) Except as provided in subdivision (c)(2) of this section, if a 30
642	641		matter referred to the Employee Benefits Division State Insurance Programs 31
643	642		Oversight Subcommittee under subsection (b) of this section would otherwise 32
644	643		require review or approval, or both, by a subcommittee of the Legislative 33
645	644		Council, the Employee Benefits Division State Insurance Programs Oversight 34
646	645		Subcommittee shall serve as the subcommittee of the Legislative Council that 35
647	646		performs the required review or approval, or both, of the matter. 36 SB481
648	647
649	648		18 03/17/2025 3:20:39 PM ANS286
650	649		(2) Proposed rules submitted to the Employee Benefits Division 1
651	650		State Insurance Programs Oversight Subcommittee under this section are not 2
652	651		subject to approval by the Employee Benefits Division State Insurance 3
653	652		Programs Oversight Subcommittee but are submitted for review purposes only. 4
654	653		(d)(1) During a regular, fiscal, or extraordinary session of the 5
655	654		General Assembly, the Joint Budget Committee shall perform the functions 6
656	655		assigned to the Employee Benefits Division State Insurance Programs Oversight 7
657	656		Subcommittee. 8
658	657		(2) The Joint Budget Committee may establish a subcommittee to 9
659	658		perform the functions of the Employee Benefits Division State Insurance 10
660	659		Programs Oversight Subcommittee that are assigned to the Joint Budget 11
661	660		Committee under subdivision (d)(1) of this section. 12
662	661		13
663	662		SECTION 12. Arkansas Code Title 19, Chapter 3, Subchapter 7, is 14
664	663		amended to add an additional section to read as follows: 15
665	664		19-3-706. Authority to establish and maintain captive insurance 16
666	665		company. 17
667	666		(a) With the approval of the State Board of Finance under this section 18
668	667		and notwithstanding § 23 -63-1625, the Treasurer of State may establish, and 19
669	668		the Secretary of the Department of Transformation and Shared Services shall 20
670	669		maintain, a captive insurance company as defined in § 23 -63-1601 to maintain 21
671	670		the State Captive Insurance Program under the State Captive Insurance Program 22
672	671		Act, § 25-44-101 et seq. 23
673	672		(b) The captive insurance company described under subsection (a) of 24
674	673		this section is: 25
675	674		(1) Subject to § 23-63-1601 et seq. and other applicable laws 26
676	675		and rules, whether or not adequate insurance markets are available to cover 27
677	676		the risks, hazards, and liabilities described in this section; 28
678	677		(2) A separate legal entity, owned and controlled by the state, 29
679	678		and shall insure only the losses, exposures, and risks of entities that are 30
680	679		subject to insurance and self -insurance requirements under state law, 31
681	680		including without limitation executive, legislative, and judicial branch 32
682	681		state agencies, public schools, and state -supported institutions of higher 33
683	682		education; and 34
684	683		(3) Administratively attached to the Department of 35
685	684		Transformation and Shared Services for the purposes of administration and 36 SB481
686	685
687	686		19 03/17/2025 3:20:39 PM ANS286
688	687		personnel. 1
689	688		(c) Through the establishment of the captive insurance company 2
690	689		described under subsection (a) of this section, the board shall: 3
691	690		(1) Annually review and approve the captive insurance company's 4
692	691		actuarial plan; 5
693	692		(2) Periodically determine, reevaluate, and revise: 6
694	693		(A) The potential losses, exposures, and risks that will 7
695	694		be insured through the captive insurance company; 8
696	695		(B) The nature and scope of insurance coverage or 9
697	696		coverages to be provided through the captive insurance company; 10
698	697		(C) The method by which coverage or coverages are to be 11
699	698		extended and contributions are to be paid and collected, including without 12
700	699		limitation premiums and assessments; 13
701	700		(D) The amount of the exposure for each line of insurance 14
702	701		coverage as well as the premium amounts for each entity, including without 15
703	702		limitation public schools, state -supported institutions of higher education, 16
704	703		and the state; 17
705	704		(E) A process through which premiums may be collected 18
706	705		directly from each entity; and 19
707	706		(F)(i) The initial and continuing capital requirements to 20
708	707		form and maintain the captive insurance company, including without limitation 21
709	708		the amount and funding source for the initial and continuing capital. 22
710	709		(ii) Initial or continuing capital may be funded by 23
711	710		general revenues from the State Captive Insurance Program Trust Fund or other 24
712	711		sources allowable under applicable laws and rules; 25
713	712		(3)(A) Establish an investment policy for the investment and 26
714	713		reinvestment of capital, premiums, and other funds and assets of the captive 27
715	714		insurance company. 28
716	715		(B) The investment policy described under subdivision 29
717	716		(c)(3)(A) of this section may authorize the funds and assets to be invested 30
718	717		in a security, investment, or investment interest that is not otherwise 31
719	718		prohibited by Arkansas Constitution, Article 12, § 5. 32
720	719		(C) Collateral that is required to secure an investment or 33
721	720		investment interest authorized in the investment policy may be in the form of 34
722	721		a security, investment, or investment interest in which the funds and assets 35
723	722		of the captive insurance company may be directly invested, including cash; 36 SB481
724	723
725	724		20 03/17/2025 3:20:39 PM ANS286
726	725		(4) Approve regulatory filings to be made by the state on behalf 1
727	726		of the captive insurance company in compliance with applicable laws and 2
728	727		rules; 3
729	728		(5)(A) Delegate to the secretary the day-to-day operations and 4
730	729		responsibilities of the captive insurance company and promulgation of rules 5
731	730		to implement this section. 6
732	731		(B) The secretary shall implement the board directives and 7
733	732		exercise the state's powers, duties, and responsibilities contained in this 8
734	733		section to implement the captive insurance company. 9
735	734		(C) The secretary may assign duties and responsibilities 10
736	735		to the secretary's staff or private vendors and contractors, as the secretary 11
737	736		deems necessary and proper, and may consult with professionals as necessary 12
738	737		about the administration of the captive insurance company. 13
739	738		(D) The secretary may also establish, implement, and adopt 14
740	739		policies, guidelines, and operating procedures under this section and the 15
741	740		board's delegation; 16
742	741		(6) Approve the dissolution of the captive insurance company 17
743	742		with the prior approval of the Legislative Council or, if the General 18
744	743		Assembly is in session, the Joint Budget Committee; and 19
745	744		(7) Perform other duties or actions necessary for the effective 20
746	745		implementation, operation, and administration of the captive insurance 21
747	746		company. 22
748	747		23
749	748		SECTION 13. Arkansas Code § 19 -5-1134 is amended to read as follows: 24
750	749		19-5-1134. Public School Insurance Trust Fund. 25
751	750		(a) There is established on the books of the Treasurer of State, the 26
752	751		Auditor of State, and the Chief Fiscal Officer of the State a trust fund to 27
753	752		be known as the “Public School Insurance Trust Fund”. 28
754	753		(b) The Public School Insurance Trust Fund shall consist of: 29
755	754		(1) A Permanent Insurance Reserve Fund, insurance premiums, 30
756	755		adjustments, earnings, interest income, and the like, as provided by the 31
757	756		Public Elementary and Secondary School Insurance Act, § 6 -20-1501 et seq., 32
758	757		and the School Motor Vehicle Insurance Act, § 6 -21-701 et seq.; and 33
759	758		(2) All funds transferred from the former Public Elementary and 34
760	759		Secondary School Insurance Fund established under §§ 6 -20-1510 [repealed] and 35
761	760		19-5-908 [repealed]; and 36 SB481
762	761
763	762		21 03/17/2025 3:20:39 PM ANS286
764	763		(3) All funds transferred from the former School Vehicle 1
765	764		Insurance Reserve Trust Fund established under § § 6-21-710 and 19-5-981 2
766	765		[repealed]. 3
767	766		(c)(1) The Public School Insurance Trust Fund shall be used for the 4
768	767		operation, maintenance, and execution of the Public Elementary and Secondary 5
769	768		School Insurance Program under the Public Elementary and Secondary School 6
770	769		Insurance Act, § 6-20-1501 et seq., and the Public School Motor Vehicle 7
771	770		Insurance Program under the School Motor Vehicle Insurance Act, § 6 -21-701 et 8
772	771		seq. 9
773	772		(2) No money shall be appropriated from the Public School 10
774	773		Insurance Trust Fund for any purpose except for the use and benefit of the 11
775	774		Public Elementary and Secondary School Insurance Program and the Public 12
776	775		School Motor Vehicle Insurance Program. 13
777	776		(3) All funds received by the State Insurance Department in the 14
778	777		administration of the Public Elementary and Secondary School Insurance 15
779	778		Program and the Public School Motor Vehicle Insurance Program as premiums, 16
780	779		adjustments, earnings, and the like: 17
781	780		(A) Shall be used for the following purposes, listed in a 18
782	781		descending order of priority: 19
783	782		(i) To defray administrative costs; 20
784	783		(ii) To pay claims; and 21
785	784		(iii) To maintain the Public School Insurance Trust 22
786	785		Fund; and 23
787	786		(B) May be invested and reinvested as the Insurance 24
788	787		Commissioner may determine. 25
789	788		(4) Moneys invested and interest earned thereon shall be 26
790	789		administered as program funds. 27
791	790		(5) All moneys deposited into the Public School Insurance Trust 28
792	791		Fund shall not be subject to any deduction, tax, levy, or any other type of 29
793	792		assessment. 30
794	793		(d) The initial loan from the former Public Elementary and Secondary 31
795	794		School Insurance Fund as established by the Public Elementary and Secondary 32
796	795		School Insurance Act, § 6 -20-1501 et seq., of one million five hundred 33
797	796		thousand dollars ($1,500,000) to fund the former School Vehicle Insurance 34
798	797		Reserve Trust Fund established under the School Motor Vehicle Insurance Act, 35
799	798		§ 6-21-701 et seq., is cancelled. 36 SB481
800	799
801	800		22 03/17/2025 3:20:39 PM ANS286
802	801		1
803	802		SECTION 14. Arkansas Code Title 19, Chapter 5, Subchapter 11, is 2
804	803		amended to add an additional section to read as follows: 3
805	804		19-5-1161. State Captive Insurance Program Trust Fund. 4
806	805		(a) There is created on the books of the Treasurer of State, the 5
807	806		Auditor of State, and the Chief Fiscal Officer of the State a trust fund to 6
808	807		be known as the "State Captive Insurance Program Trust Fund". 7
809	808		(b) The State Captive Insurance Program Trust Fund shall consist of 8
810	809		all funds transferred by the Department of Transformation and Shared Services 9
811	810		from the captive insurance company established under § 19 -3-706 and any other 10
812	811		funds provided by law. 11
813	812		(c)(1) The State Captive Insurance Program Trust Fund shall be 12
814	813		administered by and disbursed at the direction of the state. 13
815	814		(2) Moneys shall not be appropriated from the State Captive 14
816	815		Insurance Program Trust Fund for any purpose except for: 15
817	816		(A) The use and benefit of the captive insurance company 16
818	817		established under § 19 -3-706 for claims; 17
819	818		(B) Expenses of the captive insurance company established 18
820	819		under § 19-3-706, including without limitation actuarial fees, consultant 19
821	820		expenses, operating expenses, and service contract fees; and 20
822	821		(C) The personnel costs for the Department of 21
823	822		Transformation and Shared Services to support the captive insurance company 22
824	823		established under § 19 -3-706. 23
825	824		(3) All moneys deposited into the State Captive Insurance 24
826	825		Program Trust Fund shall not be subject to any deduction, tax, levy, or any 25
827	826		other type of assessment. 26
828	827		(d)(1) There is created a reserve balance sub -fund in the State 27
829	828		Captive Insurance Program Trust Fund as authorized under § 25 -44-105 with all 28
830	829		requirements as defined in that section. 29
831	830		(2) Funding allocated for operations and claims for the State 30
832	831		Captive Insurance Program shall not be considered part of the net legal 31
833	832		balance of the reserve balance sub -fund as described in § 25 -44-105. 32
834	833		33
835	834		SECTION 15. Arkansas Code § 23 -63-1614, concerning the premium tax 34
836	835		levied on captive insurers, is amended to add an additional subsection to 35
837	836		read as follows: 36 SB481
838	837
839	838		23 03/17/2025 3:20:39 PM ANS286
840	839		(k) This section does not apply to a captive insurance company 1
841	840		established under § 19 -3-706 to administer a public elementary and secondary 2
842	841		school, state-supported institution of higher education, and state -owned 3
843	842		property insurance program. 4
844	843		5
845	844		SECTION 16. Arkansas Code Title 23, Chapter 63, Subchapter 16, is 6
846	845		amended to add an additional section to read as follows: 7
847	846		23-63-1625. Authority for expenditure of public funds. 8
848	847		The state or a political subdivision of the state may expend public 9
849	848		funds for the purchase of capital stock in a captive insurance company 10
850	849		established under § 19-3-706. 11
851	850		12
852	851		SECTION 17. Arkansas Code § 23 -65-315 is amended to read as follows: 13
853	852		23-65-315. Tax on surplus lines brokers. 14
854	853		(a) No Except as otherwise provided in this section, no later than 15
855	854		sixty (60) days following the end of the calendar quarter in which surplus 16
856	855		lines insurance was procured, the surplus lines broker shall remit to the 17
857	856		Treasurer of State through the Insurance Commissioner a tax of four percent 18
858	857		(4%) on the direct premiums written, less return premiums and exclusive of 19
859	858		sums collected to cover state or federal taxes, on surplus lines insurance 20
860	859		subject to tax transacted by the surplus lines broker during the preceding 21
861	860		calendar quarter for the privilege of transacting business as a surplus lines 22
862	861		broker in this state. 23
863	862		(b) The commissioner may participate in a multistate agreement or 24
864	863		enter into a compact for the purpose of reporting, collecting, and 25
865	864		apportioning surplus lines insurance premium taxes. 26
866	865		(c) If a surplus lines insurance policy covers risks or exposures only 27
867	866		partially in this state and the commissioner has entered into an agreement 28
868	867		with other states for the apportionment of premium taxes for multistate 29
869	868		risks, the tax payable by the surplus lines broker shall be computed and paid 30
870	869		on the proportion of the premium that is properly allocable to the risks or 31
871	870		exposures located in this state according to the terms of the agreement. 32
872	871		(d) This section does not apply to a captive insurance company 33
873	872		established under § 19 -3-706 to administer a public elementary and secondary 34
874	873		school, state-supported institutions of higher education, and state -owned 35
875	874		property insurance program. 36 SB481
876	875
877	876		24 03/17/2025 3:20:39 PM ANS286
878	877		1
879	878		SECTION 18. Arkansas Code § 25 -35-102 is amended to read as follows: 2
880	879		25-35-102. Definitions. 3
881	880		For the purposes of this chapter: 4
882	881		(1) “Annual aggregate deductible” means the maximum amount 5
883	882		payable annually from the Arkansas Multi -Agency Insurance Trust Fund for 6
884	883		covered losses; 7
885	884		(2) “Insurance Commissioner” means the Insurance Commissioner of 8
886	885		the State Insurance Department or the commissioner's successor; 9
887	886		(3) "Risk manager" means the Administrator of the Risk 10
888	887		Management Division of the State Insurance Department; 11
889	888		(4)(3) "State agency" means any state agency, board, bureau, 12
890	889		commission, council, department, institution, or other similar entity; and 13
891	890		(5)(4) "Trust fund" means the Arkansas Multi -Agency Insurance 14
892	891		Trust Fund. 15
893	892		16
894	893		SECTION 19. Arkansas Code § 25 -35-103(b), concerning the purposes of 17
895	894		the Arkansas Multi-Agency Insurance Trust Fund, is amended to read as 18
896	895		follows: 19
897	896		(b) No money shall be appropriated from the Arkansas Multi -Agency 20
898	897		Insurance Trust Fund for any purpose except to pay: 21
899	898		(1) Insurance and reinsurance premiums for a motor vehicle; 22
900	899		(2) Loss adjustment expenses; 23
901	900		(3) Related educational and training expenses; 24
902	901		(4) Insured claims falling below the annual aggregate deductible 25
903	902		level; 26
904	903		(5) Expenses including actuarial, consultant, and service 27
905	904		contract fees; and 28
906	905		(6) Cybersecurity risk insurance premiums and expenses. 29
907	906		30
908	907		SECTION 20. Arkansas Code § 25 -35-104(a), concerning the agencies that 31
909	908		are allowed to participate in the Arkansas Multi -Agency Insurance Trust Fund, 32
910	909		is amended to read as follows: 33
911	910		(a) The following agencies shall participate in the Arkansas Multi -34
912	911		Agency Insurance Trust Fund: 35
913	912		(1) State agencies participating in the State Master Property 36 SB481
914	913
915	914		25 03/17/2025 3:20:39 PM ANS286
916	915		Policy as of June 30, 2003; 1
917	916		(2) The Division of Correction; 2
918	917		(3)(2) The Division of Community Correction; and 3
919	918		(4)(3) State agencies participating in the Arkansas State Master 4
920	919		Vehicle Policy as of June 30, 2003 ; and 5
921	920		(4) State agencies participating in the Arkansas Multi -Agency 6
922	921		Insurance Trust Cyber Liability Insurance Program as of June 30, 2025 . 7
923	922		8
924	923		SECTION 21. Arkansas Code § 25 -35-105(b), concerning the duties of the 9
925	924		risk manager of the State Insurance Department, is amended to read as 10
926	925		follows: 11
927	926		(b) At the discretion of the commissioner, the risk manager may: 12
928	927		(1) Enter into contracts; 13
929	928		(2) Purchase insurance and reinsurance in accordance with the 14
930	929		Arkansas Procurement Law, § 19 -11-201 et seq.; 15
931	930		(3) Adjust, settle, and pay or deny claims with notice to a 16
932	931		claimant; 17
933	932		(4) Pay expenses and costs; 18
934	933		(5) Study the risks of all participating state agencies and 19
935	934		properties their the state agencies' motor vehicle or cybersecurity risk 20
936	935		insurance coverages; 21
937	936		(6) Promulgate the form for insurance and reinsurance policies 22
938	937		and other forms; 23
939	938		(7) Issue certificates of coverage to state agencies for any 24
940	939		risks covered by the trust fund; 25
941	940		(8) Make recommendations about risk management and risk 26
942	941		reduction strategies to participating state agencies; 27
943	942		(9) Review participating state agency building construction, 28
944	943		major remodeling plans, program plans, and make recommendations to the 29
945	944		participating state agency about needed changes to address risk 30
946	945		considerations; 31
947	946		(10) Utilize underwriting discretion and authority to deny 32
948	947		coverage of any risk deemed to adversely affect the financial stability of 33
949	948		the trust fund; 34
950	949		(11) Establish values for participating state agency buildings 35
951	950		and structures to be insured; 36 SB481
952	951
953	952		26 03/17/2025 3:20:39 PM ANS286
954	953		(12)(10) Attend state agency planning and management meetings; 1
955	954		(13)(11) Review any proposed legislation and communicate with 2
956	955		members of the General Assembly and legislative committees about the 3
957	956		liability or risk management issues connected with any legislation; and 4
958	957		(14)(12) Solicit any needed information about state agency 5
959	958		plans, state agency programs, or state agency risks necessary to perform the 6
960	959		responsibilities under this chapter. 7
961	960		8
962	961		SECTION 22. Arkansas Code § 25 -35-107 is amended to read as follows: 9
963	962		25-35-107. Payment of losses. 10
964	963		The risk manager shall establish: 11
965	964		(1) Appropriate policies and procedures governing the payment of 12
966	965		losses from the Arkansas Multi -Agency Insurance Trust Fund, including notice 13
967	966		or proof of loss by any participating state agency; and 14
968	967		(2) Policies and procedures governing disputes that may arise 15
969	968		between the risk manager and any person having charge over the property motor 16
970	969		vehicle or cybersecurity risk insurance in question concerning the extent of 17
971	970		loss or damage. 18
972	971		19
973	972		SECTION 23. Arkansas Code § 25 -35-108 is repealed. 20
974	973		25-35-108. Limits on use of risk management data as evidence. 21
975	974		Notwithstanding any other provision of law, any report, recommendation, 22
976	975		survey, schedule, list, or data compiled, or action taken or not taken by or 23
977	976		at the request of the risk manager to identify, evaluate, or plan the safety 24
978	977		enhancement or risk reduction of any potential accident sites or other 25
979	978		hazards related to any entity covered by the Arkansas Multi -Agency Insurance 26
980	979		Trust Fund may not be admitted into evidence in any court or used for any 27
981	980		other purposes in any action for damages arising from any occurrence at a 28
982	981		location mentioned or addressed in the reports, recommendation, survey, 29
983	982		schedule, list, or data. 30
984	983		31
985	984		SECTION 24. Arkansas Code Title 25, is amended to add an additional 32
986	985		chapter to read as follows: 33
987	986		34
988	987		CHAPTER 44 35
989	988		STATE CAPTIVE INSURANCE PROGRAM ACT 36 SB481
990	989
991	990		27 03/17/2025 3:20:39 PM ANS286
992	991		1
993	992		25-44-101. Title. 2
994	993		This chapter shall be known and may be cited as the “State Captive 3
995	994		Insurance Program Act”. 4
996	995		5
997	996		25-44-102. Definitions. 6
998	997		As used in this chapter: 7
999	998		(1) "Cost-containment measure" means a process or practice of 8
1000	999		controlling and managing expenses of the State Captive Insurance Program 9
1001	1000		established under § 19 -5-706 by reducing or limiting the amount of spending 10
1002	1001		required to administer the p rogram and remain within specific and preplanned 11
1003	1002		budgetary constraints; 12
1004	1003		(2) "Insured entity" means a public school or state agency 13
1005	1004		insured under this chapter; 14
1006	1005		(3)(A) "Public insurance adjuster" means: 15
1007	1006		(i) An individual who, for direct, indirect, or any 16
1008	1007		other compensation: 17
1009	1008		(a) Acts on behalf of an insured in 18
1010	1009		negotiating for or effecting the settlement of a claim or claims for loss or 19
1011	1010		damage under a policy of insurance coverage real or personal property; or 20
1012	1011		(b) On behalf of any other public insurance 21
1013	1012		adjuster, investigates, settles, or adjusts, advises, or assists an insured 22
1014	1013		with a claim or claims for loss or damage under any policy of insurance 23
1015	1014		covering real or personal property; or 24
1016	1015		(ii) An individual who advertises, solicits 25
1017	1016		business, or holds himself or herself out to the public as an adjuster of 26
1018	1017		claims for loss or damage under any policy of insurance covering real or 27
1019	1018		personal property. 28
1020	1019		(B) "Public insurance adjuster" does not mean an 29
1021	1020		individual employed by the State Captive Insurance Program or employed for 30
1022	1021		the benefit of the program; 31
1023	1022		(4) "Public school" means a public elementary school, a public 32
1024	1023		secondary school, an education service cooperative, an open -enrollment public 33
1025	1024		charter school, or a state -supported institution of higher education; and 34
1026	1025		(5) "State agency" means any state agency, board, bureau, 35
1027	1026		commission, council, department, division, institution, or other similar 36 SB481
1028	1027
1029	1028		28 03/17/2025 3:20:39 PM ANS286
1030	1029		entity. 1
1031	1030		2
1032	1031		25-44-103. State Captive Insurance Program — Creation — Mandatory 3
1033	1032		participation. 4
1034	1033		(a) There is established the State Captive Insurance Program. 5
1035	1034		(b) The program shall be a system of insurance provided by a captive 6
1036	1035		insurance company established under § 19 -3-706 for public schools and state -7
1037	1036		owned properties. 8
1038	1037		(c) If a public school or state agency with state -owned property 9
1039	1038		accepts a state appropriation for a facility, then the public school or state 10
1040	1039		agency with state-owned property shall participate in the program. 11
1041	1040		12
1042	1041		25-44-104. Department of Transformation and Shared Services — Powers 13
1043	1042		and duties regarding insurance for insured entities. 14
1044	1043		(a) Upon the State Board of Finance's approval of the formation of the 15
1045	1044		captive insurance company described under § 19 -3-706, the Secretary of the 16
1046	1045		Department of Transformation and Shared Services shall: 17
1047	1046		(1) Provide administrative support and employ staff to 18
1048	1047		implement, administer, and operate the captive insurance company; 19
1049	1048		(2) Facilitate the creation, implementation, or modification of 20
1050	1049		the insurance policy issued by the captive insurance company; 21
1051	1050		(3) Facilitate agreements between the captive insurance company 22
1052	1051		and other insurers and reinsurers; 23
1053	1052		(4)(A) Facilitate contracts, agreements, and procurements on 24
1054	1053		behalf of the captive insurance company to effectuate this chapter, including 25
1055	1054		without limitation contracting with financial consultants, investment 26
1056	1055		consultants, actuaries, auditors, accountants, brokers, adjusters, attorneys, 27
1057	1056		third-party administrators, and other contractors as necessary to carry out 28
1058	1057		the duties and responsibilities of establishing, implementing, and 29
1059	1058		administering the captive insurance company. 30
1060	1059		(B) Payment for expenses for these services may come from 31
1061	1060		the State Captive Insurance Program Trust Fund under § 19 -5-1161 or the 32
1062	1061		assets of the captive insurance company; 33
1063	1062		(5) Prepare or assist in the preparation of financial statements 34
1064	1063		and reports of financial condition; 35
1065	1064		(6) Maintain or assist in maintaining accounting for the captive 36 SB481
1066	1065
1067	1066		29 03/17/2025 3:20:39 PM ANS286
1068	1067		insurance company; 1
1069	1068		(7) Ensure the captive insurance company's compliance with 2
1070	1069		applicable laws and rules; 3
1071	1070		(8) Perform other duties or actions necessary for the effective 4
1072	1071		implementation, operation, and administration of the captive insurance 5
1073	1072		company; 6
1074	1073		(9) Recommend a minimum reserve balance for the State Captive 7
1075	1074		Insurance Program Trust Fund; 8
1076	1075		(10) Enforce the prohibition of the employment of a public 9
1077	1076		adjuster by a public school that is utilizing the State Captive Insurance 10
1078	1077		Program; 11
1079	1078		(11) Coordinate with the Commission for Arkansas Public School 12
1080	1079		Academic Facilities and Transportation to ensure timely and proper 13
1081	1080		inspections of public schools participating in the program; 14
1082	1081		(12) Require every public school or state agency with state -15
1083	1082		owned property to furnish to the secretary a complete list showing the 16
1084	1083		location of every building located on a public school or state agency's real 17
1085	1084		property; and 18
1086	1085		(13) Employ necessary adjusters, engineers, appraisers, and 19
1087	1086		other personnel required in the administration of this subchapter. 20
1088	1087		(b) Funds received by the captive insurance company shall be: 21
1089	1088		(1) Used exclusively for the purposes and activities stated in 22
1090	1089		this chapter; and 23
1091	1090		(2) Invested and reinvested in the name of the captive insurance 24
1092	1091		company according to the business plan that is submitted by the captive 25
1093	1092		insurance and approved by the State Insurance Department to ensure the 26
1094	1093		investments provide the greatest benefit for the captive insurance company. 27
1095	1094		(c) Notwithstanding any law to the contrary: 28
1096	1095		(1) A reserve balance remaining unexpended at the end of a 29
1097	1096		fiscal year in the captive insurance company's fund or account does not 30
1098	1097		revert to the General Revenue Fund Account, but is carried forward into the 31
1099	1098		subsequent fiscal year; and 32
1100	1099		(2) Interest accruing on investments and deposits of the captive 33
1101	1100		insurance company shall: 34
1102	1101		(A) Be credited to the captive insurance company's fund or 35
1103	1102		account; 36 SB481
1104	1103
1105	1104		30 03/17/2025 3:20:39 PM ANS286
1106	1105		(B) Not revert to the General Revenue Fund Account; and 1
1107	1106		(C) Be carried forward into the subsequent fiscal year. 2
1108	1107		(d)(1) The captive insurance company shall maintain a policy that is 3
1109	1108		consistent with the state's claims administration process under the Arkansas 4
1110	1109		Insurance Code and other applicable laws and rules related to the adjustment, 5
1111	1110		adjudication, and settlement of claims filed against the state. 6
1112	1111		(2) The granting or denial of claims filed pursuant to the 7
1113	1112		captive insurance company's policy shall be done according to the Arkansas 8
1114	1113		Insurance Code and other applicable laws and rules. 9
1115	1114		(e) The captive insurance company established under § 19 -3-706 is 10
1116	1115		subject to: 11
1117	1116		(1) Applicable laws and rules that apply to captive insurers 12
1118	1117		under § 23-63-1601 et seq. and the applicable laws and rules governing the 13
1119	1118		captive insurance company's business structure unless specifically exempted; 14
1120	1119		and 15
1121	1120		(2) An annual audit by Arkansas Legislative Audit . 16
1122	1121		(f) The captive insurance company shall file annually a copy of the 17
1123	1122		examination performed by the State Insurance Department with the Legislative 18
1124	1123		Council or, if the General Assembly is in session, the Joint Budget 19
1125	1124		Committee. 20
1126	1125		(g) If the captive insurance company established under § 19 -3-706 21
1127	1126		ceases to exist, then its assets remaining after its obligations and 22
1128	1127		liabilities have been satisfied or discharged shall pass to and become the 23
1129	1128		property of the Restricted Reserve Fund under § 19 -5-1263. 24
1130	1129		25
1131	1130		25-44-105. Creation — Office of Property Risk. 26
1132	1131		(a) There is created within the Department of Transformation and 27
1133	1132		Shared Services the Office of Property Risk that shall administer the State 28
1134	1133		Captive Insurance Program. 29
1135	1134		(b) The program shall be administered by the Secretary of the 30
1136	1135		Department of Shared Services that shall employ a director and administrative 31
1137	1136		staff in such numbers as are necessary to carry out this subchapter. 32
1138	1137		33
1139	1138		25-44-106. Reserve balance — Funding mechanism established to maintain 34
1140	1139		reserve balance — Definition. 35
1141	1140		(a) As used in this section, “reserve balance” means the amount in a 36 SB481
1142	1141
1143	1142		31 03/17/2025 3:20:39 PM ANS286
1144	1143		fund that includes the existing balance, minus the claims that have been 1
1145	1144		incurred but not reported, case reserves, and unearned premium reserves for 2
1146	1145		each year for the State Captive Insurance Program . 3
1147	1146		(b)(1) Beginning on December 1, 2026, and annually thereafter, the 4
1148	1147		Secretary of the Department of Transformation and Shared Services shall take 5
1149	1148		any actions necessary to achieve and maintain an optimal reserve balance to 6
1150	1149		ensure the solvency of the program as actuarially determined and commensurate 7
1151	1150		with the insured exposure. 8
1152	1151		(2) As of December 1, 2025, an optimal reserve balance amount is 9
1153	1152		no less than fifty million dollars ($50,000,000) or no more than seventy -five 10
1154	1153		million dollars ($75,000,000). 11
1155	1154		(3) The secretary shall annually establish an optimal reserve 12
1156	1155		balance to ensure solvency of the program as actuarially determined and 13
1157	1156		commensurate with the insured exposure of the program with the approval of 14
1158	1157		the State Board of Finance and the Legislative Council or, if the General 15
1159	1158		Assembly is in session, the Joint Budget Committee. 16
1160	1159		(c) Annually by December 1, the secretary shall: 17
1161	1160		(1) Calculate the projected reserve balance for: 18
1162	1161		(A) The remaining calendar year; and 19
1163	1162		(B) The next three (3) calendar years; 20
1164	1163		(2) Determine whether the amount of revenue collected by the 21
1165	1164		secretary is projected to satisfy the optimal reserve balance for the program 22
1166	1165		established under subdivision (b)(1) of this section for the remaining 23
1167	1166		calendar year; 24
1168	1167		(3) Notify the board and the Legislative Council or, if the 25
1169	1168		General Assembly is in session, the Joint Budget Committee, of the projected 26
1170	1169		reserve balance for the remaining calendar year as described in subdivision 27
1171	1170		(c)(1)(A) of this section; and 28
1172	1171		(4) Submit for prior approval by the board and the Legislative 29
1173	1172		Council or, if the General Assembly is in session, the Joint Budget 30
1174	1173		Committee, his or her plan to achieve or maintain the optimal reserve 31
1175	1174		balance. 32
1176	1175		(d) If the secretary's determination under subdivision (c)(2) of this 33
1177	1176		section does not equal or exceed the acceptable reserve balance amount as 34
1178	1177		described in subdivision (b)(3) of this section, the secretary shall notify 35
1179	1178		the Legislative Council or, if the General Assembly is in session, the Joint 36 SB481
1180	1179
1181	1180		32 03/17/2025 3:20:39 PM ANS286
1182	1181		Budget Committee, of the need to convene to consider providing additional 1
1183	1182		funding. 2
1184	1183		(e)(1) If during the Legislative Council's or, if the General Assembly 3
1185	1184		is in session, the Joint Budget Committee's, review of the secretary's 4
1186	1185		determination as required under subdivision (c)(4) of this section it is 5
1187	1186		determined that additional funding is needed to maintain the acceptable 6
1188	1187		reserve balance amount as described in subdivision (b)(3) of this section, 7
1189	1188		the Legislative Council or, if the General Assembly is in session, the Joint 8
1190	1189		Budget Committee, may: 9
1191	1190		(A) Recommend that the Governor call an extraordinary 10
1192	1191		session of the General Assembly; or 11
1193	1192		(B) Take further action as may be appropriate. 12
1194	1193		(2) If the General Assembly fails to provide funding by March 1 13
1195	1194		following the Legislative Council's or, if the General Assembly is in 14
1196	1195		session, the Joint Budget Committee's review, the secretary shall initiate a 15
1197	1196		process to collect the required additional revenue from program participants 16
1198	1197		through premium rate increases or reducing program benefits, or both, for the 17
1199	1198		next plan year. 18
1200	1199		(f)(1) If the secretary determines that the reserve balance for the 19
1201	1200		program will exceed seventy -five million dollars ($75,000,000), the secretary 20
1202	1201		may elect to use the excess reserve balance by lowering the premium rates for 21
1203	1202		the next plan year with prior approval from the Legislative Council or, if 22
1204	1203		the General Assembly is in session, the Joint Budget Committee. 23
1205	1204		(2) If the secretary does not elect to use the excess reserve 24
1206	1205		balance in the manner prescribed under subdivision (f)(1) of this section, 25
1207	1206		the secretary shall report to the Legislative Council or, if the General 26
1208	1207		Assembly is in session, the Joint Budget Committee, the reason for the 27
1209	1208		secretary's decision not to use the excess reserve balance. 28
1210	1209		29
1211	1210		25-44-107. Accountability — Legislative oversight — Transparency — 30
1212	1211		Annual reports — Definition. 31
1213	1212		(a) The Secretary of the Department of Transformation and Shared 32
1214	1213		Services and the State Board of Finance shall report annually to the 33
1215	1214		Legislative Council, or if the General Assembly is in session, the Joint 34
1216	1215		Budget Committee, on the status of the State Captive Insurance Program . 35
1217	1216		(b) The annual report required under subsection (a) of this section 36 SB481
1218	1217
1219	1218		33 03/17/2025 3:20:39 PM ANS286
1220	1219		shall: 1
1221	1220		(1) Be known as the " State Captive Insurance Program Annual 2
1222	1221		Report"; 3
1223	1222		(2) Be submitted to the Legislative Council or, if the General 4
1224	1223		Assembly is in session, the Joint Budget Committee, no later than thirty (30) 5
1225	1224		calendar days after the end of each plan year; and 6
1226	1225		(3) Include without limitation the following information 7
1227	1226		regarding the program: 8
1228	1227		(A) A detailed statement of investments and earnings; 9
1229	1228		(B) A new or significantly modified cost -containment 10
1230	1229		measure; 11
1231	1230		(C) Any change in plan options offered under the program; 12
1232	1231		(D) Potential funding changes to the program; 13
1233	1232		(E) Any premium increases or decreases over the previous 14
1234	1233		plan year; 15
1235	1234		(F) Any concern involving the reserve balance for the 16
1236	1235		program; 17
1237	1236		(G) Changes to the current calendar year projections and 18
1238	1237		the three-year projections for the program; 19
1239	1238		(H) Changes that would limit, eliminate, or increase 20
1240	1239		benefits of plan options offered under the program and the impact these 21
1241	1240		changes would have on the fiscal viability of the program, including the 22
1242	1241		reserve balance for the program; 23
1243	1242		(I) Changes that would limit, eliminate, or increase 24
1244	1243		eligibility requirements for the program; 25
1245	1244		(J) Vendor or broker issues or changes in vendors or 26
1246	1245		brokers from the previous year; 27
1247	1246		(K) Proposed contracts or changes in contracts from the 28
1248	1247		previous year; 29
1249	1248		(L) Any change in consultants from the previous year; 30
1250	1249		(M) Rules promulgated by the Department of Transformation 31
1251	1250		and Shared Services or the secretary regarding the implementation, 32
1252	1251		administration, or enforcement of the program; and 33
1253	1252		(N) Such other matters related to the program as the 34
1254	1253		Legislative Council considers necessary to perform its oversight of all 35
1255	1254		matters related to the program. 36 SB481
1256	1255
1257	1256		34 03/17/2025 3:20:39 PM ANS286
1258	1257		1
1259	1258		25-44-108. Finding of uninsurability — Effect. 2
1260	1259		(a)(1) The Secretary of the Department of Transformation and Shared 3
1261	1260		Services may maintain an inspection and engineering service designed to 4
1262	1261		reduce the hazards in buildings insured under the State Captive Insurance 5
1263	1262		Program. 6
1264	1263		(2) Upon review of the Legislative Council or, if the General 7
1265	1264		Assembly is in session, the Joint Budget Committee , the secretary may: 8
1266	1265		(A) Cancel or choose to not renew insurance on any insured 9
1267	1266		entity's property if the property is deemed no longer insurable; and 10
1268	1267		(B) Refuse to insure property when it determines that the 11
1269	1268		property does not meet program guidelines. 12
1270	1269		(b) In carrying out his or her duties under this section, the 13
1271	1270		secretary may request, and the insured entity shall provide, any information 14
1272	1271		requested for a determination concerning the reasons for the denial, 15
1273	1272		nonrenewal, or cancellation of insurance coverage. 16
1274	1273		17
1275	1274		25-44-109. Premium rate and payment. 18
1276	1275		(a) The premium rate established under this chapter shall be 19
1277	1276		actuarially determined and commensurate with the insured exposure. 20
1278	1277		(b) An insured entity shall make payment of the insured entity's 21
1279	1278		premium when demand is made as scheduled in the contract. 22
1280	1279		(c)(1) An insured entity that does not pay the premium when due shall 23
1281	1280		be charged a rate of interest at five percent (5%) per annum on all payments 24
1282	1281		due and unpaid on the policy issued. 25
1283	1282		(2) If an insured entity does not pay the premium due within 26
1284	1283		thirty (30) days, the insurance coverage may be canceled upon thirty (30) 27
1285	1284		days' notice. 28
1286	1285		29
1287	1286		25-44-110. Public insurance adjuster — Prohibited. 30
1288	1287		The use of a public insurance adjuster or any type of public adjusting 31
1289	1288		is prohibited by an insured entity under the State Captive Insurance Program. 32
1290	1289		33
1291	1290		25-44-111. Expeditious claims filing. 34
1292	1291		A claim made under the State Captive Insurance Program is required to 35
1293	1292		be filed no later than one (1) year after the loss is incurred. 36 SB481
1294	1293
1295	1294		35 03/17/2025 3:20:39 PM ANS286
1296	1295		1
1297	1296		SECTION 25. DO NOT CODIFY. Severability. 2
1298	1297		The provisions of this act shall be severable, and if any phrase, 3
1299	1298		clause, sentence, or provision is deemed unenforceable, the remaining 4
1300	1299		provisions of the act shall be enforceable. 5
1301	1300		6
1302	1301		SECTION 26. DO NOT CODIFY. Transitional provision for outstanding 7
1303	1302		claims. 8
1304	1303		(a) The Secretary of the Department of Transformation and Shared 9
1305	1304		Services shall promulgate rules to address the filing dates for a property 10
1306	1305		claim that is incurred but not reported under the Public Elementary and 11
1307	1306		Secondary School Insurance Act, § 6 -20-1501 et seq. or the Arkansas Multi -12
1308	1307		Agency Insurance Trust Fund Act, § 25 -35-101 et seq., once the State Captive 13
1309	1308		Insurance Program is operational. 14
1310	1309		(b) At a date to be determined by the secretary by rule, a property 15
1311	1310		claim shall be adjusted and paid, under the: 16
1312	1311		(1) Public Elementary and Secondary School Insurance Act, § 6 -17
1313	1312		20-1501 et seq.; or 18
1314	1313		(2) Arkansas Multi-Agency Insurance Trust Fund Act, § 25 -35-101 19
1315	1314		et seq. 20
1316	1315		(c)(1) The Arkansas School Boards Association shall be responsible for 21
1317	1316		a property claim that is incurred before the State Captive Insurance Program 22
1318	1317		is operational but has not been reported under the plan that is administered 23
1319	1318		by the Arkansas School Boards Association and the property claim shall be 24
1320	1319		adjusted and paid under the plan that is administered by the Arkansas School 25
1321	1320		Boards Association. 26
1322	1321		(2) The State Captive Insurance Program is not responsible for a 27
1323	1322		property claim that is incurred on the date determined by the secretary under 28
1324	1323		subsection (b) of this section that has not been reported under the plan that 29
1325	1324		is administered by the Arkansas School Boards Association. 30
1326	1325		(d) A property claim that is incurred on and after a date to be 31
1327	1326		determined by the secretary by rule shall be filed with the State Captive 32
1328	1327		Insurance Program. 33
1329	1328		34
1330	1329		SECTION 27. EMERGENCY CLAUSE. It is found and determined by the 35
1331	1330		General Assembly of the State of Arkansas that an instability in the property 36 SB481
1332	1331
1333	1332		36 03/17/2025 3:20:39 PM ANS286
1334	1333		insurance industry has led to increases in costs for public schools, state -1
1335	1334		supported institutions of higher education, and taxpayers for state -owned 2
1336	1335		property; that these increases are not sustainable under the current system; 3
1337	1336		that a new system for property insurance for public schools, state -supported 4
1338	1337		institutions of higher education, and state -owned property is needed to 5
1339	1338		alleviate the impact of high costs and provide a greater amount of certainty 6
1340	1339		concerning costs; and that this act is immediately necessary because it 7
1341	1340		establishes a new system for property insurance for public schools, stae -8
1342	1341		supported institutions of higher education, and state -owned property to allow 9
1343	1342		for better utilization of state resources and greater control to regulate 10
1344	1343		costs. Therefore, an emergency is declared to exist, and this act being 11
1345	1344		immediately necessary for the preservation of the public peace, health, and 12
1346	1345		safety shall become effective on: 13
1347	1346		(1) The date of its approval by the Governor; 14
1348	1347		(2) If the bill is neither approved nor vetoed by the Governor, 15
1349	1348		the expiration of the period of time during which the Governor may veto the 16
1350	1349		bill; or 17
1351	1350		(3) If the bill is vetoed by the Governor and the veto is 18
1352	1351		overridden, the date the last house overrides the veto. 19
1353	1352		20
1354	1353		21
1355		-	~~APPROVED: 4/17/25~~ 22
	1354	+	22
1356	1355		23
1357	1356		24
1358	1357		25
1359	1358		26
1360	1359		27
1361	1360		28
1362	1361		29
1363	1362		30
1364	1363		31
1365	1364		32
1366	1365		33
1367	1366		34
1368	1367		35
1369	1368		36