| Arkansas Prepaid Funeral Benefits Law |
| § 23-40-123 |
Delinquency
Proceedings |
| (a) |
The
Insurance Commissioner may apply to a court of competent jurisdiction for an order
appointing him in his official capacity as receiver of and directing him to conserve,
rehabilitate or liquidate a prepaid funeral benefits contracts licensee upon one (1) or
more of the following grounds: |
|
(1) |
The licensee has not maintained
trust funds received from contracts in the manner required by Arkansas Code 23-40-114; |
|
(2) |
The licensee has allowed its
permit to lapse, or be revoked in accordance with this chapter, and has not made a full
and complete accounting and restitution, if appropriate, of all prepaid funeral benefits
contracts funds deposited with it; |
|
(3) |
The licensee is impaired or
insolvent; |
|
(4) |
The licensee has
refused to submit its books, records, accounts or affairs to reasonable examination by the
Insurance Commissioner; |
|
(5) |
The licensee or any officer,
director, or manager of the licensee has refused to be examined under oath concerning the
licensee's affairs; |
|
(6) |
There is reasonable
cause to believe that there has been embezzlement, misappropriate or other wrongful
misapplication or use of trust funds or fraud affecting the ability of the licensee to
perform its obligations under prepaid funeral benefits contracts sold or assumed by the
licensee; |
|
(7) |
The licensee has
failed to file its annual report within the time required by law and, after written demand
by the Insurance Commissioner, has failed to promptly give an adequate explanation for
such failure. |
| (b) |
Circuit
courts shall have original jurisdiction of all delinquency proceedings under this chapter,
and any such court is authorized to make all necessary or appropriate orders to carry out
the purposes of this chapter. |
| (c) |
The venue
of delinquency proceedings against a licensee shall be in the Circuit Court of Pulaski
County. |
| (d) |
Delinquency
proceedings instituted pursuant to this chapter shall constitute the sole and exclusive
method of liquidating, rehabilitating, or conserving a licensee, and no court shall
entertain a petition for the commencement of such proceedings unless the petition has been
filed in the name of the state on the relation of the Insurance Commissioner. |
| (e) |
The
Insurance Commissioner shall commence any such proceeding by application to the court for
an order directing the licensee to show cause why the Insurance Commissioner should not
have the relief prayed for in the application. On the return of such order to show cause,
and after a full hearing, the court shall either deny the application or grant the
application, together with such other relief as the nature of the case and the interests
of the prepaid contracts purchaser, contract beneficiaries or the public may require. |
| (f) |
An appeal
shall lie to the Supreme Court from an order granting or refusing rehabilitation,
liquidation, or conservation, and from every other order in deliquency proceedings having
the character of a final order as to the particular portion of proceedings embraced
therein. |
| Section 11 |
|
Compliance with this act shall be required for all licensees
on and after March 16, 1997. |
| Section 12 |
|
| All provisions of
this act of a general and permanent nature are amendatory to the Arkansas Code of 1987
Annotated and the Arkansas Code Revision Commission shall incorporate the same in the
Code. |
| Section 13 |
|
If any provision of this act or the application thereof to any
person or circumstance is held invalid, such invalidity shall not affect other provisions
or applications of the act which can be given effect without the invalid provision or
application, and to this end the provisions of this act are declared to be severable. |
