Claims-Made Policies

Arkansas Insurance Department ce Mike Beebe Governor Op ARI(N BULLETIN NO. 10-2013 DATE: April 15, 2013 Jay Bradford Commissioner TO: ALL LICENSED PROPERTY AND CASUALTY INSURERS, ALL ADVISORY ORGANIZATIONS, THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS, AND OTHER INTERESTED PARTIES FROM: ARKANSAS INSURANCE DEPARTMENT SUBJECT: CLAIMS-MADE POLICIES The purpose of this bulletin is to inform all insurers licensed and authorized to write commercial insurance coverage in this state of the requirements of Arkansas law for disclosure upon "claims-made" policy forms and both the automatic and optional extended reporting periods upon cancellation or termination of the policy. Under Ark. Code Ann. § 23-79-306(1), the claims-made policy application and the initial page of each claims-made policy must include a conspicuous notice at the top indicating that the contract is a claimsmade policy. The claims-made notice and insuring agreement must include the following language, or similar language: This coverage is limited to claims first made and reported to the Company during the policy period as stated in the Declarations or any applicable Extended Reporting Period. The required notice also serves to clarify the intent of Ark. Code Ann. § 23-79-306(2) — (3), which allows for claims to be made and reported during both the statutorily provided automatic sixty-day extended reported period, which begins upon cancellation or termination of the policy by either the insured or insurer, and the optional extended reporting period obtained through a purchased endorsement. Failure to comply with Ark. Code Ann. § 23-79-306 is a violation of the Arkansas Insurance Code. Claims-made policy forms submitted to the Department without the appropriate disclosure notice are subject to disapproval upon examination by the Department. Questions concerning this Bulletin may be directed to Edith Roberts, Property & Casualty Compliance Officer, Arkansas Insurance Department, Compliance Division, at (501) 371-2808 or by e-mail at edith.roberts@arkansas.gov. JAY FORD INSURANCE COMM STATE OF ARKANS S SIONER O ,L l c;)D/3 DAT4 I 1200 West Third Street, Little Rock, AR 72201-1904 • (501) 371-2600 • (501) 371-2618 fax • www.insurance.arkansas.gov Information (800) 282-9134 • Consumer Services (800) 852-5494 • Seniors (800) 224-6330 • Criminal Inv. (866) 660-0888