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The purpose of the Arkansas Insurance Department (AID) is to protect the public interest by the equitable enforcement of the state’s laws and regulations affecting the insurance industry. In addition, the AID seeks to deter and prosecute fraud.
The work of the AID was formerly placed by law in the office of the Auditor of the State. The “Insurance Bureau” (as it was originally known) was established in the auditor’s office by Act 106 of 1873, the auditor being charged by the same act (approved on April 25, 1873) with the execution of the laws of the state relating to insurance. Due to the greatly increased volume of work required of the Insurance Bureau, the Arkansas General Assembly of 1917, by Act 190 (approved on March 7, 1917), created the Arkansas Insurance Department. The act directed the head of the department to be an insurance commissioner appointed by the governor with the advice and consent of the state Senate. The insurance commissioner is to enforce the provisions of the Arkansas Insurance Code and execute the duties imposed upon him or her by the code.
Bruce T. Bullion, the first insurance commissioner, appointed in 1917, stated in the department’s Annual Report of the Department of Insurance and Fire Prevention, “The citizens of Arkansas paid for insurance (all kinds) in 1917 the sum of $14,802,256.” In the calendar year 2010, $9,942,990,358 in direct premium was written in the state.
A chief function of the AID is the protection of insurance consumers in Arkansas. The Consumer Services Division (CSD), one of seventeen divisions housed within the department, assists insurance consumers with complaints and inquiries regarding insurance companies, agents, and adjusters. CSD investigates all complaints, working with the insurance company and the consumer to determine the appropriate course of action. In 2010, CSD recovered over $6 million for Arkansas insurance consumers. CSD travels statewide to provide educational information and materials and, in the event of significant storm damage, travels to damaged areas to assist homeowners with filing claims and procuring emergency living expenses.
The Affordable Care Act (ACA), which was signed into law in March 2010, placed great implementation responsibilities upon state insurance departments across the country. In Arkansas, the AID received a million-dollar federal grant from the U.S. Department of Health and Human Services to begin planning for a health benefits exchange, which is an efficient, easy-to-use, and trusted health insurance marketplace that allows consumers to understand, compare, and enroll in available insurance coverage plans based on benefits, services, quality, and price. The AID received an initial million-dollar federal grant to establish a more transparent rate review process whereby health insurers seeking to increase rates must provide consumers with easy-to-understand information about the reasons for significant rate increases and post justification for increases; another award of $3.6 million was later made to the AID for additional rate review efforts. The department is charged with making sure consumers understand the entire process. A smaller federal grant of approximately $300,000 added a section to the Consumer Services Division—the Arkansas Consumer Assistance Program (CAP)—to assist consumers with filing health insurance complaints and appeals.
Another primary function of the department is the licensing of resident and nonresident producers, adjusters, title agents, and business entities that are soliciting, selling, or negotiating insurance in Arkansas. This function is performed by the License Division, which also oversees producer examinations and investigates all resident applicants by reviewing Arkansas State Police records. It also ensures that all necessary laws are followed regarding license renewals and continuing education. In 2010, there were 77,598 nonresident producers and adjusters licensed in Arkansas, as well as 18,543 resident producers and adjusters. There were also 1,552 licensed insurance companies in the state.
As of 2011, the Arkansas Insurance Department has approximately 185 employees, and the Arkansas insurance commissioner is Jay Bradford, who was appointed by Governor Mike Beebe on January 15, 2009. Bradford served in the Arkansas legislature for twenty-four years, during which he was chosen as both speaker pro tempore of the House and president pro tempore of the Senate. Three former Arkansas insurance commissioners—W. H. L. Woodyard III, Lee Douglass, and Mike Pickens—have served as president of the National Association of Insurance Commissioners (NIAC), which is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the fifty states, the District of Columbia, and five U.S. territories.
For additional information: Arkansas Insurance Department. http://www.insurance.arkansas.gov/ (accessed October 12, 2011).
Alice JonesArkansas Insurance Department
Last Updated 2/27/2012
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