Arkansas Code Title 23. Public Utilities and Regulated Industries § 23-63-701. Determination of insurer's risk

(a) No insurer shall retain any risk on any one (1) subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding ten percent (10%) of its surplus to policyholders. Provided, with the prior approval of the Insurance Commissioner, such a limitation shall not apply to a subject of insurance controlled by the insurer or owned by an affiliate of the insurer.

(b) A “subject of insurance” for the purposes of this section as to insurance against fire and hazards other than windstorm, earthquake, or other catastrophic hazards includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of the other hazard insured against.

(c) Reinsurance ceded as authorized by §§ 23-62-202, 23-62-204, and 23-62-205 shall be deducted in determining risk retained. As to surety risks, deduction shall also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the surety's consent and for the surety's protection.

(d) As to alien insurers, this section shall relate only to risks and surplus to policyholders of the insurer's United States branch.

(e) “Surplus to policyholders”, for the purpose of this section, in addition to the insurer's capital and surplus, shall be deemed to include any voluntary reserves which are not required pursuant to law and shall be determined from the last sworn statement of the insurer on file with the commissioner, or by the last report of examination of the insurer, whichever is the more recent at the time of assumption of risk.

(f) This section shall not apply to life insurance, disability insurance, title insurance, annuities, insurance of wet marine and foreign trade insurance risks, workers' compensation insurance, employers' liability coverages, nor to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.