§ 23-63-1606 - Organization.
23-63-1606. Organization.
(a) A producer reinsurance captive insurance company, pure captive insurance company, or a sponsored captive insurance company must be incorporated as a domestic stock insurer under 23-69-206 with its capital divided into shares and held by the stockholders.
(b) An association captive insurance company or an industrial insured captive insurance company may be:
(1) Incorporated as a stock insurer with its capital divided into shares and held by the stockholders;
(2) Incorporated as a mutual insurer without capital stock, the governing body of which is elected by the member organizations of its association; or
(3) Organized as a reciprocal insurer under 23-70-101 et seq.
(c) A captive insurance company shall have at least one (1) incorporator.
(d) The alien captive insurance company may register to do business in this state after the commissioner's certificate has been issued.
(e) The capital stock of a captive insurance company incorporated as a stock insurer must be issued at not less than par value.
(f) At least one (1) of the members of the board of directors of a captive insurance company formed as a corporation in this state must be a resident of the United States or a United States territory.
(g) At least one (1) of the members of the subscribers' advisory committee of a captive insurance company formed as a reciprocal insurer must be a resident of the United States or a United States territory.
(h) (1) A captive insurance company formed as a corporation under this subchapter has the privileges of and is subject to the general corporation law of this state and applicable provisions of this subchapter.
(2) If a conflict occurs between general corporation law and this subchapter, the latter controls.
(3) (A) The Arkansas Insurance Code concerning mergers, consolidations, conversions, mutualizations, and redomestications applies in determining the procedures to be followed by a captive insurance company in carrying out any of those transactions.
(B) The commissioner may waive or modify the requirements for public notice and hearing in accordance with regulations that the commissioner may promulgate addressing categories of transactions.
(C) If a notice of public hearing is required but no one requests a hearing, the commissioner may cancel the hearing.
(i) (1) (A) A captive insurance company formed as a reciprocal insurer under this subchapter is subject to 23-70-101 et seq. and applicable provisions of this subchapter.
(B) If a conflict occurs between 23-70-101 et seq. and this subchapter, the latter controls.
(C) To the extent a reciprocal insurer is made subject to the Arkansas Insurance Code under 23-70-101 et seq., the Arkansas Insurance Code is not applicable to a reciprocal insurer formed under this subchapter unless expressly made applicable to a captive insurance company by this subchapter.
(2) In addition to subdivision (i)(1) of this section, a captive insurance company organized as a reciprocal insurer that is an industrial insured group is subject to 23-70-101 et seq. and applicable provisions of the Arkansas Insurance Code.
(j) The articles of incorporation or bylaws of a captive insurance company may authorize a quorum of a board of directors to consist of no fewer than one-third (1/3) of the fixed or prescribed number of directors under 4-27-824(b).
(k) The subscribers' agreement or other organizing document of a captive insurance company formed as a reciprocal insurer may authorize a quorum of a subscribers' advisory committee to consist of no fewer than one-third (1/3) of the number of its members.