The bill amends the regulations surrounding captive insurers in Arkansas, notably redefining "association" to eliminate the requirement for continuous existence for at least one year. It also repeals the definitions for "Commissioner" and "Department." A significant addition is the provision allowing the Insurance Commissioner to issue provisional licenses to captive insurance companies when it serves the public interest, along with specific conditions for these licenses. Additionally, the capital and surplus requirements for various types of captive insurance companies are adjusted, with several minimum amounts being reduced.

Further changes include new regulations on dividend payments, requiring prior approval from the commissioner for certain distributions while permitting pure captive insurance companies to pay ordinary dividends without such approval. The bill clarifies operational requirements for captive insurance companies, including provisions for foreign or alien insurers to redomesticate in Arkansas. It also allows the commissioner to waive audit or actuarial opinion requirements for pure captive insurance companies. Key insertions include a minimum net equity requirement of $100 million for pure captive insurance companies, a mandate for consolidated audits, and a financial strength rating of "BBB" or better. The bill also revises the premium tax structure and outlines conditions for the suspension or revocation of a captive insurance company's certificate of authority, aiming to strengthen the regulatory framework and ensure compliance and financial stability.

Statutes affected:
SB 237: 23-63-1601(3), 23-63-1601(9), 23-63-1601(11), 23-63-1602, 23-63-1604(a), 23-63-1604(d), 23-63-1605(a), 23-63-1606, 23-63-1608, 23-63-1614, 23-70-101, 23-63-1607(b), 23-63-1608(a), 23-63-1624(c)
Act 554: 23-63-1601(3), 23-63-1601(9), 23-63-1601(11), 23-63-1602, 23-63-1604(a), 23-63-1604(d), 23-63-1605(a), 23-63-1606, 23-63-1608, 23-63-1614, 23-70-101, 23-63-1607(b), 23-63-1608(a), 23-63-1624(c)