Ark. Code Ann. § 23-79-202 (2020)
Limitation of actions
- An action may be maintained in the courts of this state by an insured or any other person on his or her behalf to recover on any claim or loss arising under a policy of insurance on property or life against the insurer issuing the policy or against the sureties on any bond filed by the insurer as a condition precedent to its right to do business in this state, at any time within the period prescribed by law for bringing actions on promises in writing.
- Any stipulation or provision in the policy or contract requiring the action to be brought within any shorter time or be barred is void.
History. Acts 1959, No. 148, § 299; A.S.A. 1947, § 66-3232.
Cross References. Limitation of action on instruments in writing, § 16-56-111.
Research References
ALR.
What constitutes bad faith on part of insurer rendering it liable for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured's claim — Particular conduct of insurer. 115 A.L.R.5th 589.
What constitutes bad faith on part of insurer rendering it liable for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured's claim — Particular grounds for denial of claim: matters relating to policy. 116 A.L.R.5th 247.
Case Notes
Construction.
This section's reference to “period prescribed by law for bringing actions on promises in writing” does not incorporate the judicial rule of law that generally permits insurers to shorten the period for bringing actions under insurance policies to a reasonable time. Graham v. Hartford Life & Accident Ins. Co., 677 F.3d 801 (8th Cir. 2012).
Applicability.
Insured's breach of contract suit, which was brought outside an accidental death and dismemberment policy's three-year time limit, was timely; this section precluded the insurer from contractually shortening the limitations period to less than the five-year period for breach of contract actions under § 16-56-111(a). Graham v. Hartford Life & Accident Ins. Co., 677 F.3d 801 (8th Cir. 2012).
Accrual of Cause of Action.
Former section did not limit the right of parties to a contract as to when or under what conditions a cause of action on an insurance policy shall arise. Pacific Mut. Life Ins. Co. v. Butler, 190 Ark. 282, 78 S.W.2d 813 (1935) (decision under prior law).
Insured's declaratory relief action to determine the availability of underinsured motorist benefits was an action to recover a claim arising under a policy of insurance and was governed by the five-year statute of limitation in § 16-56-111; in addition, the running of the statute of limitation was triggered by the breach of the contract and not the underlying accident. Shelter Mut. Ins. Co. v. Nash, 357 Ark. 581, 184 S.W.3d 425 (2004).
Choice of Law.
Insured's claim against insurers was not time-barred, because under Arkansas Supreme Court precedent, Arkansas law applied and therefore a policy provision requiring suit to be filed before the statute of limitations expired was void under this section. Simmons Foods, Inc. v. Indus. Risk Insurers, 863 F.3d 792 (8th Cir. 2017).
Disability Clause.
Former section applied to an action on the disability clauses of a life policy so as to render void a clause attempting to create a limitations period shorter than one prescribed in former section. Mutual Benefit Health & Accident Ass'n v. Warrell, 96 F.2d 447 (8th Cir. 1938), cert. denied, Mutual Ben. Health & Acci. Asso. v. Warrell, 305 U.S. 612 (1938), rehearing denied, Mutual Ben. Health & Acci. Asso. v. Warrell, 305 U.S. 671 (1938) (decision under prior law).
Foreign Policy.
Former section prevailed as against time limitation fixed in policy issued in foreign state. Gulf Ins. Co. v. Holland Constr. Co., 218 Ark. 405, 236 S.W.2d 1003 (1951) (decision under prior law).
Fraternal Benefit Societies.
Former section did not apply to policies issued by fraternal benefit societies. Phillips v. Mosaic Templars of Am., 154 Ark. 173, 241 S.W. 869 (1922); Liebe v. Sovereign Camp, W.O.W., 205 Ark. 540, 170 S.W.2d 370 (1943) (preceding decisions under prior law).
Surety Insurance.
Fidelity bond executed by insurers was surety insurance and not property insurance and, therefore, the plaintiff could not invoke the proscription of this section to void a limitation provision shorter than the one prescribed by this section contained in the bond. Chandler Trailer Co. v. Lawyer's Sur. Corp., 535 F. Supp. 204 (E.D. Ark. 1982).
Cited: First Pyramid Life Ins. Co. of Am. v. Stoltz, 311 Ark. 313, 843 S.W.2d 842 (1992).