All Roll Calls
Yes: 121 • No: 5
ArkansasHB18212025 Regular SessionHouse
TO CREATE A MORE SUSTAINABLE SYSTEM OF PROPERTY INSURANCE FOR PUBLIC SCHOOLS, INSTITUTIONS OF HIGHER EDUCATION, AND STATE-OWNED PROPERTY; AND TO DECLARE AN EMERGENCY.
Sponsored By: Ben Gilmore (Republican), Jeff Wardlaw (Republican)
Enacted
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Bill Overview
Analyzed Economic Effects
12 provisions identified: 3 benefits, 6 costs, 3 mixed.
Excess Reserves Can Lower Public Premiums
If reserves are expected to exceed $75 million, the Secretary can use the excess to lower public entities' premiums. Any reduction applies to the next plan year. Prior Legislative Council approval is required, or Joint Budget Committee approval while the legislature is in session. The law sets no reduction amount.
Public Insurance Gets Protected Reserve Funds
A new trust fund pays only the state insurer's claims, expenses, and supporting department staff costs; deposits are tax-exempt. A separate reserve account excludes money allocated for operations and claims from its net legal balance. The initial reserve target is $50 million to $75 million as of December 1, 2025. Beginning December 1, 2026, the Secretary must take steps to maintain a reserve based on insured risks. Annual targets require State Board of Finance and Legislative Council approval, or Joint Budget Committee approval during legislative sessions.
State Property Insurer Gets Tax Exemptions
The state captive insurer is exempt from the captive-insurer premium tax and the surplus-lines broker tax. The general surplus-lines tax is 4% of direct surplus-lines premiums, remitted within 60 days after each calendar quarter. The exemptions apply to the insurer covering public schools, state-supported colleges, and state-owned property. They do not give households a direct tax break or guarantee lower premiums.
New Office Takes Over Public Insurance
The law creates an Office of Property Risk within the Department of Transformation and Shared Services, with required staff. Transfers of insurance authority, records, contracts, personnel, property, and unspent funds begin July 1, 2025. Cabinet-level transfers must finish by December 1, 2025, and all transfers by December 1, 2026. Existing insurance offices can continue program work until their transfers finish or November 30, 2025, whichever comes first. The Secretary can extend that transition deadline by rule only to adjust and pay claims.
Public Insurance Claims Face New Limits
Entities must file State Captive Insurance Program claims within one year after the loss. They cannot use public insurance adjusters or public adjusting services. Once the program operates, the Secretary must set transition filing dates by rule. Earlier unreported losses covered by the Arkansas School Boards Association plan remain that Association's responsibility, not the captive insurer's. Losses on or after the date set by rule must be filed with the State Captive Insurance Program.
Public Insurers Face Premium Payment Penalties
Program premiums must reflect calculated insurance risks, and public entities must pay when demanded under their contracts. Unpaid premiums earn interest at 5% per year. After a premium remains unpaid for 30 days, coverage can be canceled with 30 days' notice. If reserve funding remains short and lawmakers have not provided needed money by March 1 after legislative review, the Secretary must act. Premium increases, benefit cuts, or both apply for the next plan year.
Public Property Coverage Faces New Conditions
Public schools and state agencies accepting state facility appropriations must join the State Captive Insurance Program. Districts seeking Academic Facilities Partnership or Catastrophic Program funding must insure their buildings, facilities, and business property through it. The Secretary can refuse coverage for property that fails program guidelines. Cancellation or nonrenewal because property is no longer insurable requires Legislative Council review, or Joint Budget Committee review during sessions. Insured entities must provide information requested for these coverage decisions.
School Vehicle Loan Cancellation Is Repealed
The law removes the provision canceling an initial $1.5 million loan to the School Vehicle Insurance Reserve Trust Fund. It does not state the loan's current balance or repayment terms. The repeal does not establish a direct household payment.
Schools Lose Some Insurance Safeguards
The school insurance trust fund must still pay covered property losses as contracts require. The law removes the three-appraiser process for disputes about a loss's size or value. It removes directions requiring the Insurance Department to ensure school policies satisfy specified bond-related coverage requirements. It also removes the minimum A.M. Best rating requirement for insurers covering school property, boilers, machinery, and extended risks. No replacement rating standard is specified.
Agency Insurance Trust Shifts Toward Cybersecurity
The Arkansas Multi-Agency Insurance Trust Fund's general insurance and reinsurance premium-payment authority is limited to motor vehicles. Separate authority allows cybersecurity insurance premiums and expenses. Membership drops agencies included through State Master Property Policy participation as of June 30, 2003. It adds agencies participating in the Trust Cyber Liability Insurance Program as of June 30, 2025. The Division of Community Correction and State Master Vehicle Policy participants as of June 30, 2003, remain included.
State Insurance Combines Coverage And Contributions
The law authorizes the Treasurer to create a separate, state-owned insurer with State Board of Finance approval. It can insure only entities subject to state insurance or self-insurance requirements, including public schools, colleges, and state agencies. The board reviews the insurance plan and sets coverage, premiums, assessments, and capital needs. State entities must coordinate coverage rules for public buildings and business property. Arkansas and local governments can use public money to buy the insurer's stock, but purchases are not required.
Schools Get Cyber Coverage With Conditions
School districts, education service cooperatives, and open-enrollment charter schools can choose state cybersecurity insurance through a multischool program. The Insurance Department can require reports covering contract end dates, loss history, and other insurer-requested information. It can deny cybersecurity coverage when property fails program guidelines. Affected districts must provide requested information about denial, nonrenewal, or cancellation.
Sponsors & Cosponsors
Sponsors
Ben Gilmore
Republican • Senate
Jeff Wardlaw
Republican • House
Cosponsors
Brandon Achor
Republican • House
Breanne Davis
Republican • Senate
Blake Johnson
Republican • Senate
Howard M. Beaty, Jr.
Republican • House
Mary Bentley
Republican • House
Frances Cavenaugh
Republican • House
Bruce Cozart
Republican • House
Cindy Crawford
Republican • House
David Whitaker
Democratic • House
Carol Dalby
Republican • House
Les D. Eaves
Republican • House
Jon S. Eubanks
Republican • House
Brian S. Evans
Republican • House
Fred Allen
Democratic • House
Zack Gramlich
Republican • House
RJ Hawk
Republican • House
Bart Hester
Republican • Senate
Ricky Hill
Republican • Senate
Mike Holcomb
Republican • House
Missy Irvin
Republican • Senate
Justin Boyd
Republican • Senate
Joshua Bryant
Republican • Senate
Jonathan Dismang
Republican • Senate
Jeremiah Moore
Republican • House
Jim Petty
Republican • Senate
Jay Richardson
Democratic • House
Lane Jean
Republican • House
Joey L. Carr
Republican • House
Matt Brown
Republican • House
Matthew J. Shepherd
Republican • House
John Maddox
Republican • House
Ron McNair
Republican • House
Jon Milligan
Republican • House
Stetson Painter
Republican • House
Shad Pearce
Republican • House
Chad Puryear
Republican • House
Terry Rice
Republican • Senate
Marcus E. Richmond
Republican • House
Trey Steimel
Republican • House
Matt Stone
Republican • Senate
DeAnn Vaught
Republican • House
Steven Walker
Republican • House
Les Warren
Republican • House
Carlton Wing
Republican • House
Jeremy Wooldridge
Republican • House
Jim Wooten
Republican • House
Roll Call Votes
Senate vote • 4/8/2025
Senate Vote - Tuesday, April 8, 2025 10:14:29 PM
Yes: 32 • No: 0 • Other: 2
House vote • 4/1/2025
House Vote - Tuesday, April 1, 2025 3:25:56 PM
Yes: 89 • No: 5 • Other: 4
Actions Timeline
Notification that HB1821 is now Act 560
4/14/2025HouseCorrectly enrolled and ordered transmitted to the Governor's Office.
4/9/2025HouseTO BE ENROLLED
4/9/2025HouseReturned from the Senate as passed.
4/9/2025HouseReturned to the House as passed.
4/8/2025SenateEMERGENCY CLAUSE ADOPTED
4/8/2025SenateRead the third time and passed.
4/8/2025SenateReturned by the Committee, with the recommendation that it Do Pass
4/3/2025SenateRead first time, rules suspended, read second time, referred to INSURANCE & COMMERCE - SENATE
4/1/2025SenateReceived from the House.
4/1/2025SenateEMERGENCY CLAUSE ADOPTED
4/1/2025HouseRead the third time and passed and ordered transmitted to the Senate.
4/1/2025HouseReturned by the Committee Do Pass
3/31/2025HouseRead the first time, rules suspended, read the second time and referred to the Committee on INSURANCE & COMMERCE- HOUSE
3/18/2025HouseFiled
3/18/2025House
Bill Text
HB1821 - Introduced
3/18/2025
Act Version
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