Ark. Code Ann. § 23-60-102 (2026)
Definitions
As used in the Arkansas Insurance Code, unless the context otherwise requires:
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- “Insurance” is any agreement, contract, or other transaction whereby one party, the “insurer”, is obligated to confer benefit of pecuniary value upon another party, the “insured” or “beneficiary”, dependent upon the happening of a fortuitous event in which the insured or beneficiary has, or is expected to have at the time of such a happening, a material interest that will be adversely affected by the happening of such an event.
- A “fortuitous event” means any occurrence or failure to occur that is, or is assumed by the parties to be, to a substantial extent beyond the control of either party.
- “Insurance” shall, for purposes of subtitle 3 of this title, be deemed to include “annuities”, which are agreements by insurers to make periodic payments that continue during the survival of the measuring life or lives under the agreements or for a specified period.
- “Reinsurance” is a contract under which an originating insurer, called the “ceding” insurer, procures insurance for itself in another insurer, called the “assuming” insurer or reinsurer, with respect to part or all of an insurance risk of the originating insurer.
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- “Insurance” shall not include a debt cancellation agreement.
- “Debt cancellation agreement” is a loan term or contractual arrangement modifying a loan term dealing with motor vehicles under which a lender agrees to cancel all or part of a borrower's obligation to repay an extension of credit from the lender upon the occurrence of a specified event other than the death or disability of the borrower. The agreement may be separate from or a part of other loan documents.
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- “Insurer” includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance;
- “Person” includes an individual, insurer, company, association, organization, Lloyd's, society, reciprocal or inter-insurance exchange, partnership, syndicate, business trust, corporation, and every legal entity;
- “Commissioner” means the Insurance Commissioner of this state;
- “Department” means the State Insurance Department;
- A “domestic” insurer is one formed under the laws of this state;
- A “foreign” insurer means one formed under the laws of any jurisdiction other than this state;
- An “alien” insurer means one formed under the laws of any country other than the United States, its states, districts, territories, and commonwealths;
- Except where distinguished by context, “foreign” insurers include also “alien” insurers;
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- When used in a context signifying a jurisdiction other than the State of Arkansas, “state” means any state, district, territory, commonwealth, or possession of the United States.
- For purposes of conforming the Arkansas Insurance Code to comply with the provisions of the North American Free Trade Agreement, “state” shall also be deemed to include Canada and the Republic of Mexico, as appropriate;
- An “authorized” insurer means one duly authorized by a subsisting certificate of authority issued by the commissioner to transact insurance in this state;
- An “unauthorized” insurer is one not authorized by a subsisting certificate of authority issued by the commissioner to transact insurance in this state;
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“Transact” with respect to insurance includes any of the following:
- Solicitation and inducement;
- Preliminary negotiations;
- Effectuation of a contract of insurance;
- Transaction of matters subsequent to effectuation of a contract of insurance and arising out of it;
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“Wet marine and foreign trade insurance”, with the exception of chapter 67 of this title, shall include only:
- Insurances upon vessels, crafts, hulls, and of interests therein or with relation thereto;
- Insurance of marine builders' risks, marine war risks, and contracts of marine protection and indemnity insurance;
- Insurance of freights and disbursements pertaining to a subject of insurance coming within this definition; and
- Insurance of personal property and interests therein, in course of exportation from or importation into any country, or in course of transportation by land, water, or air from point of origin to final destination, in respect to, appertaining to, or in connection with any and all risks or perils of navigation, transit, or transportation, and while being prepared for and while awaiting shipment, and during any delays, storage, transshipment, or reshipment incident thereto.
History. Acts 1959, No. 148, §§ 2-9, 69; 1968 (1st Ex. Sess.), No. 24, § 5; 1975, No. 450, § 1; 1979, No. 908, § 1; 1981, No. 595, § 1; A.S.A. 1947, §§ 66-2002 — 66-2009, 66-2302; Acts 1993, No. 901, § 5; 1995, No. 1272, § 1; 1997, No. 1000, § 1; 2007, No. 496, § 23.
Publisher's Notes. Acts 1959, No. 148, § 69, is also codified as §§ 26-57-601 — 26-57-605, 26-57-607.
The Arkansas Insurance Code, referred to in this section, was originally enacted by Acts 1959, No. 148. Acts 1959, No. 148 is codified as set out in the note following § 23-60-101.
Amendments. The 2007 amendment added (1)(D) and made a minor punctuation change.
Research References
Ark. L. Notes.
Copeland, A Brief Survey of Some Important 1991 and 1992 Insurance Law Decisions, 1992 Ark. L. Notes 85.
Case Notes
Foreign Insurer.
An Arkansas court has authority under the Arkansas long-arm statute and the due process clause, U.S. Const. Amend. 14, to exercise jurisdiction over a foreign insurance company in a suit by the insured to recover under the insurance policy's uninsured motorist clause for damages arising out of an accident in Arkansas with an uninsured Arkansas motorist. Szalay v. Handcock, 307 Ark. 232, 819 S.W.2d 232 (1991).
Insurance.
Memberships in automobile motor club come within the definition of insurance. Arkansas Motor Club, Inc. v. Arkansas Emp. Sec. Div., 237 Ark. 419, 373 S.W.2d 404 (1963).
The services and benefits provided by motor clubs to their members constitute insurance under this section. Arkansas Motor Club, Inc. v. Arkansas Emp. Sec. Div., 237 Ark. 419, 373 S.W.2d 404 (1963).
A factoring agreement was held to be a contract for the purchase of an account receivable, even though the account was an open account, and did not constitute a contract for insurance of credit as defined in this section. Manhattan Factoring Corp. v. Orsburn, 238 Ark. 947, 385 S.W.2d 785 (1965).
Contracts of insurance should receive a practical, reasonable and fair interpretation consonant with the apparent object and intent of the parties in the light of their general object and purpose. Tri-State Ins. Co. v. Sing, 41 Ark. App. 142, 850 S.W.2d 6 (1993).
Claimant could not sue the health system under the direct-action statute because the health system's pooled comprehensive liability program did not meet the statutory definition of insurance; the program was not mandatory, and claimant offered no evidence that a profit motive existed in the program or that the program was actuarially sound. Sowders v. St. Joseph's Mercy Health Ctr., 368 Ark. 466, 247 S.W.3d 514 (2007).
—Debt Cancellation Contract.
Contracts with debt cancellation clauses will be considered contracts of insurance, and thus invalid, when: (1) the cancellation clause is mandatory, (2) the purchaser pays a fee for inclusion of the clause, (3) profit-making by the vendor is a major reason for including the clause, (4) risk of loss is placed on the purchaser, and (5) the vendor is not licensed or authorized to be in the business of insurance. Douglas v. Dynamic Enters., Inc., 315 Ark. 575, 869 S.W.2d 14 (1994).
A contract entitled “Total Loss-Vehicle Purchase Contract Waiver,” which could be purchased for a weekly or monthly fee, which provided that car dealer would extinguish the outstanding debt on a vehicle purchased and financed through it, if the vehicle were wrecked and totalled, or stolen through no fault or negligence of the purchaser, was a debt cancellation contract, and was insurance as defined by this section. Douglas v. Dynamic Enters., Inc., 315 Ark. 575, 869 S.W.2d 14 (1994).
—Determinative Factors.
Whether a particular contract or activity constitutes the business of insurance can be determined by the following factors: (1) whether the plan is mandatory, (2) whether a profit motive exists in offering the plan, and (3) whether the plan is intended to be actuarially sound. Douglas v. Dynamic Enters., Inc., 315 Ark. 575, 869 S.W.2d 14 (1994); Cherry v. Tanda, Inc., 327 Ark. 600, 940 S.W.2d 457 (1997).
Insurer.
Union benefit fund held to constitute an insurance company. Bost v. Masters, 235 Ark. 393, 361 S.W.2d 272 (1962).
Health system did not meet the statutory definition of an insurer under the Arkansas Insurance Code because it was not in the business of entering into contracts of insurance. Sowders v. St. Joseph's Mercy Health Ctr., 368 Ark. 466, 247 S.W.3d 514 (2007).
Cited: West & Co. v. Sykes, 257 Ark. 245, 515 S.W.2d 635 (1974); Waire v. Joseph, 308 Ark. 528, 825 S.W.2d 594 (1992); Dynamic Enters. Inc. v. Taylor, 38 Ark. App. 184, 832 S.W.2d 278 (1992); Matson, Inc. v. Lamb & Assocs. Packaging, 328 Ark. 705, 947 S.W.2d 324 (1997).