Insurance companies, agencies, brokers and producers may offer installment payment plans to Arkansas policyholders for the payment of premium, according to the Arkansas Insurance Department. However, except for those fees specifically allowed by Ark. Code Ann. § 23-66-308, such fees must be included in any rate filing made in Arkansas by the insurer.
A bulletin released by the department clarified that Insurance Commissioner Jay Bradford will disapprove any installment fee that is excessive or exceeds the actual cost of processing and servicing the installment payment plan.
The charging of such a fee absent the requisite filings would constitute a violation of Ark. Code Ann. § 23-66-310(b)(1), which prohibits collection of a fee in excess of the premium rate as filed and approved, where necessary, by the Commissioner or a fee that exceeds the premiums and charges specified in the policy.
If an installment payment fee is charged and the fee was not specified in the policy itself, except to the extent provided in an applicable filing with this Department, the fee could be a violation of Ark. Code Ann. § 23-66-308. Subsection (a) of that statute prohibits the provision of credit or any other benefit not specified in the policy as an inducement to insure.
Source: Arkansas Insurance Department
Topics Arkansas
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