1.1 Arkansas Insurance Department

Arkansas Property & Casualty Insurance State

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1 Standalone Coverage Map

Standalone Coverage Map

2 Introduction: Arkansas Property & Casualty Insurance Exam Overview

Arkansas Property & Casualty Exam Overview

3 National Portion: Insurance Fundamentals

1.1 Risk, Hazards, Perils, and the Law of Large Numbers 1.2 Insurable Interest, Indemnity, and Other Insurance Principles 1.3 Insurance Contract Law and Elements 1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions 1.5 Parties, Agents vs. Brokers, and Authority

4 National Portion: Property Insurance Concepts

2.1 Causes of Loss / Named-Peril vs. Open-Peril 2.2 Valuation: ACV, Replacement Cost, and Functional Value 2.3 Coinsurance and the Coinsurance Formula 2.4 Deductibles, Limits, and Loss Settlement 2.5 Common Property Policy Conditions and Clauses

5 National Portion: Dwelling Policies (DP)

3.1 Dwelling Policy Forms DP-1, DP-2, DP-3 3.2 Dwelling Coverages A-E and Other Coverages 3.3 Dwelling Perils, Conditions, and Endorsements 3.4 Mobile Home and Specialized Dwelling Coverage

6 National Portion: Homeowners Policies - Forms & Section I

4.1 Homeowners Forms HO-2 through HO-8 and Eligibility 4.2 Section I Coverages A-D and Additional Coverages 4.3 Section I Perils Insured Against and Exclusions 4.4 Replacement Cost vs. ACV and Loss Settlement in Homeowners

7 National Portion: Homeowners Policies - Section II & Endorsements

5.1 Section II Coverages E (Liability) and F (Medical Payments) 5.2 Homeowners Conditions and Duties After Loss 5.3 Common Homeowners Endorsements (scheduled property, water backup, ordinance or law)

8 National Portion: Personal Auto Policy - Liability & Injury

6.1 Personal Auto Policy Structure and Eligibility 6.2 Part A Liability and Supplementary Payments 6.3 Part B Medical Payments 6.4 Part C Uninsured/Underinsured Motorists

9 National Portion: Personal Auto Policy - Physical Damage & Duties

7.1 Part D: Coverage for Damage to Your Auto 7.2 Exclusions and Part E: Duties After an Accident 7.3 Part F: General Provisions, Endorsements, and No-Fault Concepts

10 National Portion: Liability Insurance Concepts

8.1 Negligence, Torts, and Legal Liability 8.2 Defenses, Damages, and Vicarious Liability 8.3 Occurrence vs. Claims-Made Triggers 8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury

11 National Portion: Commercial Property Insurance

9.1 Commercial Package Policy Structure and Common Policy Conditions 9.2 Building and Personal Property Coverage Form (BPP) 9.3 Causes of Loss Forms (Basic, Broad, Special) 9.4 Business Income and Extra Expense 9.5 Commercial Property Endorsements and the BOP

12 National Portion: Commercial General Liability - Coverages

10.1 CGL Coverage A: Bodily Injury and Property Damage Liability 10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments 10.3 Who Is an Insured and Supplementary Payments

13 National Portion: Commercial General Liability - Limits, Triggers & Exclusions

11.1 CGL Limits of Insurance and Aggregates 11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates 11.3 Key CGL Exclusions and Endorsements

14 National Portion: Commercial Auto Insurance

12.1 Business Auto Coverage Form and Covered Auto Symbols 12.2 Commercial Auto Liability and Physical Damage 12.3 Motor Carrier / Trucking and MCS-90 12.4 Garage Coverage Form and Garagekeepers 12.5 Commercial Auto Endorsements

15 National Portion: Workers Compensation

13.1 Workers Compensation Statutory Background and Benefits 13.2 Part One (Workers Comp) and Part Two (Employers Liability) 13.3 Premium Basis, Experience Modification, and Classification 13.4 Other States, USL&H, and Federal Acts 13.5 Workers Comp Exclusions and Endorsements

16 National Portion: Other Commercial Lines - BOP, Crime & Marine

14.1 Businessowners Policy (BOP) in Depth 14.2 Crime and Fidelity Coverage 14.3 Inland Marine and Nationwide Marine Definition 14.4 Ocean Marine Coverages (Hull, Cargo, Freight, P&I)

17 National Portion: Other Commercial Lines - Specialty & Professional

15.1 Farm and Agricultural Coverage 15.2 Commercial Umbrella and Excess Liability 15.3 Professional Liability and Errors & Omissions 15.4 Directors & Officers and Employment Practices Liability

18 National Portion: Other Commercial Lines - Surety, Flood & Specialty

16.1 Surety and Fidelity Bonds 16.2 National Flood Insurance Program (NFIP) 16.3 Cyber, Aviation, and Other Specialty Lines

19 National Portion: Insurance Regulation & Market Conduct

17.1 State Regulation, Licensing, and the McCarran-Ferguson Act 17.2 Rates, Forms, Solvency, and Guaranty Associations 17.3 Producer Authority, Fiduciary Duty, and Company Operations

20 National Portion: Ethics & Unfair Trade Practices

18.1 Unfair Trade Practices and Unfair Claims Settlement 18.2 Producer Ethics, Errors & Omissions Exposure, and Fiduciary Conduct 18.3 Privacy, Fraud, and Consumer Protection

21 Chapter 1: Arkansas P&C Insurance Regulation & Licensing

1.1 Arkansas Insurance Department 1.2 Arkansas P&C Producer Licensing Requirements 1.3 Arkansas Producer Responsibilities

22 Chapter 2: Arkansas Property Insurance

2.1 Arkansas Homeowners Insurance 2.2 Arkansas Commercial Property Insurance

23 Chapter 3: Arkansas Casualty & Auto Insurance

3.1 Arkansas Auto Insurance Requirements 3.2 Arkansas Liability Insurance 3.3 Arkansas Workers' Compensation Insurance

24 Chapter 4: Arkansas Ethics & Professional Conduct

4.1 Ethical Practices and Consumer Protection

1.1 Arkansas Insurance Department

Key Takeaways Explain This Topic AI

The Arkansas Insurance Department (AID) regulates all insurance under Arkansas Code Annotated (ACA) Title 23, with the Insurance Commissioner as chief regulator.

The Commissioner is appointed by the Governor and serves at the Governor's pleasure — Arkansas does not elect its Commissioner.

Arkansas P&C rates follow a 'file and use' standard: rates may not be excessive, inadequate, or unfairly discriminatory (ACA 23-67-208).

AID powers include licensing, rate review, financial and market-conduct exams, complaint handling, and rulemaking.

The Consumer Services Division hotline is (800) 852-5494; producers should know AID's enforcement and complaint role for the state-law exam section.

Last updated: June 2026

The Arkansas Insurance Department

The Arkansas Insurance Department (AID) is the state agency that supervises every insurer, producer, and adjuster doing business in Arkansas. Its authority comes from Arkansas Code Annotated (ACA) Title 23 , the state Insurance Code. On the combined licensing exam, 25 of the 125 scored questions cover the Arkansas-specific (multi-line) state-law section , so the Department's structure and powers are heavily tested.

The Insurance Commissioner

The Arkansas Insurance Commissioner heads AID. Memorize these facts, because exam questions reliably test the selection method:

Appointed by the Governor (NOT elected by voters and NOT chosen by the legislature).

Serves at the pleasure of the Governor — there is no fixed term.

Must enforce Title 23 and may adopt rules , hold hearings, issue cease-and-desist orders, and levy penalties.

Commissioner Powers

Power What it covers
Licensing Issue, renew, suspend, or revoke producer, adjuster, and company licenses
Rate & form review Review P&C rate and policy-form filings for compliance
Financial exams Audit insurer solvency and reserves
Market conduct Examine claims, underwriting, and sales practices
Enforcement Investigate violations, fine, and discipline licensees
Rulemaking Adopt regulations (e.g., Rule 50 on continuing education)
Rate Regulation: The 'File and Use' Standard

Most Arkansas P&C lines operate under a file and use approach. Insurers file rates with AID and may begin using them after filing; the Department reviews them afterward. The legal test under ACA 23-67-208 is that a rate may not be:

Excessive — unreasonably high for the risk and the level of competition;
Inadequate — too low to cover expected losses and expenses, threatening solvency; or

Unfairly discriminatory — charging different rates to risks of the same class and hazard without an actuarial basis.

Common trap: Charging two drivers with identical risk profiles different premiums is unfair discrimination . Charging a high-risk driver more than a low-risk driver is lawful risk classification, not discrimination.

Consumer Protection

The Consumer Services Division investigates policyholder complaints, mediates disputes, and can refer patterns of abuse for enforcement. A consumer who believes a claim was wrongly denied can file a written complaint, and AID will request the insurer's file and a written response.

Toll-free hotline: (800) 852-5494
Local: (501) 371-2640
Website: insurance.arkansas.gov
Address: 1 Commerce Way, Suite 102, Little Rock, AR 72202

Exam tip: When a scenario asks what a dissatisfied policyholder should do first, the answer is usually 'file a complaint with the Arkansas Insurance Department,' not 'sue the insurer.'

Certificate of Authority and Admitted vs. Surplus Lines

Before an insurer can sell P&C coverage in Arkansas, the Commissioner must grant a Certificate of Authority (COA) . An insurer holding a valid COA is an admitted (authorized) insurer : its rates and forms are reviewed, its solvency is monitored, and its policyholders are protected by the Arkansas Property and Casualty Insurance Guaranty Association , which pays covered claims (subject to caps) if the insurer becomes insolvent.

When no admitted insurer will write a hard-to-place risk, coverage may be placed with a surplus lines (non-admitted) insurer through a licensed surplus lines broker . Key distinctions tested on the exam:

Feature Admitted insurer Surplus lines insurer
Certificate of Authority Yes No (eligible, not admitted)
Rate/form filing review Yes No
Guaranty Association protection Yes No
Who may place Any licensed producer Surplus lines broker after diligent search

Because surplus lines policies are not backed by the guaranty fund, the broker must first make a diligent effort to place the risk in the admitted market and must disclose the lack of guaranty protection to the insured.

How AID Examinations Work

AID conducts two distinct exam types. A financial examination verifies that an insurer holds adequate reserves and surplus to pay claims. A market-conduct examination reviews how the insurer treats consumers — looking at advertising, underwriting, rating, claims handling, and complaint records. A producer's files (applications, premium remittance, correspondence) can be pulled into a market-conduct exam, which is why accurate recordkeeping is a regulatory duty, not just good practice.

Mini-Scenario

An insured's roof claim is denied. She calls her agent, who agrees the denial looks wrong but cannot change it. The best regulatory next step is for the insured to file a written complaint with AID Consumer Services , which will demand the insurer's claim file and a written explanation. If AID finds a pattern of improper denials, it can open a market-conduct examination and impose penalties — but the individual claim dispute may still require the insured to pursue the insurer directly or through appraisal.

Common trap: AID resolves complaints and disciplines insurers, but it does not act as the consumer's lawyer or award damages in a contract dispute. Do not pick 'the Department will pay the claim' as an answer.

Hearings, Penalties, and Due Process

When AID believes a licensee violated Title 23, it must give notice and an opportunity for a hearing before imposing most penalties. After a hearing the Commissioner may suspend or revoke a license, levy fines, or order restitution. A licensee who disagrees may seek judicial review in the Arkansas courts. The key sequence to remember is: investigation → notice → hearing → order → appeal. An exam answer that lets the Commissioner revoke a license 'immediately with no hearing' is wrong except for narrow emergency cease-and-desist situations.

NAIC and Why Arkansas Looks Like Other States

Arkansas is a member of the National Association of Insurance Commissioners (NAIC) , a coordinating body of state regulators. The NAIC writes model laws — such as the Unfair Trade Practices Act and the Producer Licensing Model Act — that Arkansas has largely adopted into Title 23. The NAIC is not a federal regulator and has no direct authority over an Arkansas producer; insurance regulation remains a state function under the McCarran-Ferguson Act . Expect a question distinguishing the NAIC's advisory/model role from AID's binding enforcement power.