HB1240 Summary

• Modifies Arkansas Code § 23-62-305 to restructure and clarify requirements for domestic insurers to receive credit for reinsurance ceded to assuming insurers, reorganizing subsections and renumbering categories

• Establishes multiple pathways for reinsurance credit based on assuming insurer status: licensed insurers, accredited reinsurers (requiring $20 million surplus), domiciled insurers with similar standards, trust fund arrangements, and certified reinsurers

• Adds new provisions allowing credit for reinsurance ceded to assuming insurers in "reciprocal jurisdictions" subject to covered agreements (including those under the Dodd-Frank Act), with specified capital, solvency, and compliance requirements

• Requires ceding insurers to manage reinsurance recoverables and notify the Insurance Commissioner within 30 days when exposures exceed 50% of surplus or when cessions exceed 20% of gross written premium

• Declares an emergency and makes the act effective July 1, 2021, citing the need to clarify and simplify reinsurance credit procedures to benefit Arkansas citizens