(a) Premiums.
(1)
(A) The Arkansas Comprehensive Health Insurance Pool shall establish premium rates for plan coverage as provided in subdivision (a)(2) of this section.
(B) Separate schedules of premium rates based on age, sex, and geographical location may apply for individual risks.
(C) Premium rates and schedules shall be submitted to the Insurance Commissioner for approval prior to use.
(2)
(A)
(i) With the assistance of the commissioner, the pool shall determine a standard risk rate by considering the premium rates charged by other insurers offering health insurance coverage to individuals in Arkansas.
(ii) The standard risk rate shall be established using reasonable actuarial techniques and shall reflect anticipated experience and expenses for the coverage.
(B)
(i) Rates for plan coverage shall not exceed one hundred fifty percent (150%) of rates established as applicable for individual standard risks in Arkansas.
(ii) Subject to the limits provided in this subdivision (a)(2), subsequent rates shall be established to help provide for the expected costs of claims, including recovery of prior losses, expenses of operation, investment income of claim reserves, and any other cost factors subject to the limitations described in this section.
(b) Sources of Additional Revenue.
(1) In addition to the powers enumerated in § 23-79-506, the pool shall have the authority to:
(A) Assess insurers in accordance with the provisions of this section; and
(B)
(i) Make advance interim assessments as may be reasonable and necessary for the pool's organizational and interim operating expenses.
(ii) Any such interim assessments may be credited as offsets against any regular assessments due following the close of the fiscal year.
(2)
(A) Following the close of each fiscal year, the plan administrator shall determine the net premiums, that is, premiums less administrative expense allowances, the pool expenses of administration and operation, and the incurred losses for the year, taking into account investment income and other appropriate gains and losses.
(B) The deficit incurred by the pool not otherwise recouped under either subdivision (b)(9) of this section or subsection (e) of this section [repealed], or both, shall be recouped by assessments apportioned among insurers by the Board of Directors of the Arkansas Comprehensive Health Insurance Pool.
(3) Each insurer's assessment shall be determined by multiplying the total assessment of all insurers as determined in subdivision (b)(2) of this section by a fraction, the numerator of which equals that insurer's premium and subscriber contract charges for health insurance written in the state during the preceding calendar year and the denominator of which equals the total of all health insurance premiums by all insurers.
(4)
(A) If assessments or other funds received under either subdivision (b)(9) of this section or subsection (e) of this section [repealed], or both, or any combination of the assessments and funds exceed the pool's actual losses and administrative expenses, the excess shall be held at interest and used by the board to offset future losses or to reduce future assessments.
(B) As used in this subsection, “future losses” includes reserves for incurred but not reported claims.
(5) Each insurer's assessment shall be determined annually by the board based on annual statements and other reports deemed necessary by the board and filed by the insurer with the board or the commissioner.
(6)
(A)
(i) An insurer may petition the commissioner for an abatement or deferment of all or part of an assessment imposed by the board.
(ii) The commissioner may abate or defer, in whole or in part, the assessment if, in the opinion of the commissioner, payment of the assessment would endanger the ability of the insurer to fulfill its contractual obligations.
(B)
(i) In the event an assessment against an insurer is abated or deferred, in whole or in part, the amount by which the assessment is abated or deferred shall be assessed against the other insurers in a manner consistent with the basis for assessments set forth in this subsection.
(ii) The insurer receiving the abatement or deferment shall remain liable to the plan for the deficiency for four (4) years.
(7) For all assessments issued by the board, beginning January 1, 1998, only those individuals, corporations, associations, or other entities defined as an insurer in § 23-79-503 shall be subject to assessment.
(8) In the event the board fails to act within a reasonable period of time to recoup by assessment any deficit incurred by the pool, the commissioner shall have all the powers and duties of the board under this chapter with respect to assessing insurers.
(9) The General Assembly further intends that the pool be eligible for, and for the pool, its board, or other officers of state government, as appropriate, to take steps necessary to obtain federal grant funds to offset losses of the pool, including any funds made available under the Trade Adjustment Assistance Reform Act of 2002.
(c) Assessment Offsets.
(1) Any assessment may be offset in an amount equal to the amount of the assessment paid to the pool against the premium tax payable by that insurer for the year in which the assessment is levied or for the four (4) years subsequent to that year.
(2) No offset shall be allowed for any penalty assessed under subdivision (d)(1) of this section.
(d)
(1) All assessments and fees shall be due and payable upon receipt and shall be delinquent if not paid within thirty (30) days of the receipt of the notice by the insurer.
(2) Failure to timely pay the assessment will automatically subject the insurer to a ten percent (10%) penalty, which will be due and payable within the next thirty-day period.
(3) The board and the commissioner shall have the authority to enforce the collection of the assessment and penalty in accordance with the provisions of this subchapter and the Arkansas Insurance Code.
(4) The board may waive the penalty authorized by this subsection if it determines that compelling circumstances exist that justify such a waiver.