Current through Register Vol. 49, No. 9, September, 2024
SECTION 1.
PURPOSE
The purpose of this Rule and Regulation is to establish
requirements and standards for a limited license for rental companies by the
Commissioner. The Commissioner may issue to a rental company a limited license
authorizing the limited licensee to offer or sell insurance in connection with
the rental of vehicles.
SECTION
2.
AUTHORITY
This Rule is issued under the authority vested in the
Commissioner of Insurance ("Commissioner") by Ark. Code Ann. Section
23-64-304(a).
SECTION 3.
EFFECTIVE DATE
This Rule and Regulation shall be effective December 1,
1999.
SECTION 4.
APPLICABILITY
This rule shall be applicable to those rental companies holding a
limited license pursuant to Ark. Code Ann. §
23-64-205.
SECTION 5.
DEFINITIONS
(A) "Limited license" means the authority of
a person or entity authorized to sell certain coverages relating to the rental
of vehicles pursuant to the provisions of this subsection.
(B) "Rental agreement" means any written
agreement setting forth the terms and conditions governing the use of a vehicle
provided by the rental company for rental or lease.
(C) "Rental company" means any person or
entity in the business of providing primarily private passenger vehicles to the
public under a rental agreement for a period not to exceed ninety (90)
days.
(D) "Renter" means any person
obtaining the use of a vehicle from a rental company under the terms of a
rental agreement for a period not to exceed ninety (90) days.
(E) "Vehicle" or "rental vehicle" means a
motor vehicle of the private passenger type including passenger vans, minivans
and sport utility vehicles, and of the cargo type, including cargo vans, pick
up trucks and trucks with a gross vehicle weight of less than twenty-six
thousand (26,000) pounds, and which do not require the operator to possess a
commercial driver's license.
(F)
"Rental period" means the term of the rental agreement.
SECTION 6.
ISSUANCE OF LICENSE TO
RENTAL COMPANY
For issuance of a limited license the applicant shall file a
written application with the commissioner for a limited license. The
application shall be signed by an officer of the applicant and containing such
information as the commissioner may prescribe. Pursuant to the Administrative
and Regulatory Fee in Ark. Code Ann. §
23-61-706(b),
the licensing fee for nonresident and resident rental companies shall be $35.00
each year. The license of rental companies shall be renewed each year on the
anniversary date of licensure.
SECTION
7.
VIOLATION AND PENALTY
If any provision of this subsection is violated by a limited
licensee, the commissioner may:
(A)
After notice and a hearing, revoke or suspend a limited license issued under
this subsection in accordance with the provisions of law; or
(B) After notice and hearing, impose such
other penalties, including suspending the transaction of insurance at specific
rental locations where violations of this subsection have occurred, as the
commissioner deems to be necessary or convenient to carry out the purposes of
this subsection.
SECTION
8.
AUTHORITY OF RENTAL COMPANY WITH LIMITED LICENSE
The rental company licensed pursuant to this subsection may offer
or sell insurance underwritten by a licensed insurer or authorized surplus
lines carrier only in connection with and incidental to the rental of vehicles.
These provisions apply whether rental occurs at the rental office or by
preselection of coverage in a master, corporate, group rental, or individual
agreement in any of the following general categories:
(A) Personal accident insurance covering the
risks of travel, including but not limited to accident and health insurance
that provides coverage, as applicable, to renters and other rental vehicle
occupants for accidental death or dismemberment and reimbursement for medical
expenses resulting from an accident that occurs during the rental
period;
(B) Liability insurance,
which, at the exclusive option of the rental company, may include uninsured and
underinsured motorist coverage whether offered separately or in combination
with other liability insurance, that provides coverage, as applicable, to
renters and other authorized drivers of rental vehicles for liability arising
from the operation of the rental vehicle;
(C) Personal effects insurance that provides
coverage, as applicable, to renters and other vehicle occupants for the loss
of, or damage to, personal effects that occurs during the rental
period;
(D) Roadside assistance and
emergency sickness protection programs; and
(E) Any other travel or auto-related coverage
that a rental company offers in connection with and incidental to the rental of
vehicles.
SECTION 9.
RESTRICTIONS ON TYPE OF INSURANCE RENTAL COMPANY HAS AUTHORITY TO
ISSUE
A limited licensee can only issue insurance if it meets the
following provisions:
(A) The rental
period of the rental agreement does not exceed ninety (90) consecutive days;
and
(B) At every rental location
where rental agreements are executed, brochures or other written materials are
readily available to the prospective renter that:
(i) Summarize, clearly and correctly, the
material terms of coverage offered to renters, including the identity of the
insurer;
(ii) Disclose that the
coverage offered by the rental company may provide a duplication of coverage
already provided by a renter's personal automobile insurance policy,
homeowner's insurance policy, personal liability insurance policy, or other
source of coverage;
(iii) State
that the purchase by the renter of the kinds of coverage specified in this
subsection is not required in order to rent a vehicle; and
(iv) Describe the process for filing a claim
in the event the renter elects to purchase coverage and in the event of a
claim.
(C) Evidence of
coverage is disclosed within the rental agreement provided to every renter who
elects to purchase such coverage.
SECTION 10.
AUTHORITY OF EMPLOYEE OF
RENTAL COMPANY
Any limited license issued under this subsection shall also
authorize any employee of the limited licensee to act individually on behalf,
and under the supervision of the limited licensee with respect to the kinds of
coverage specified in this subsection.
SECTION 11.
TRAINING OF EMPLOYEE OF
RENTAL COMPANY
Each rental company licensed pursuant to this subsection shall
conduct a training program in which employees being trained shall receive basic
instruction about the kinds of coverage specified in this subsection and
offered for purchase by prospective renters of rental vehicles.
SECTION 12.
FUNDS DO NOT
NEED TO BE TREATED AS FUNDS ACCEPTED IN A FIDUCIARY CAPACITY
Notwithstanding any other provision of this subsection, or any
rule adopted by the commissioner, a limited licensee pursuant to this
subsection shall not be required to treat monies collected from renters
purchasing such insurance when renting vehicles as funds received in a
fiduciary capacity, provided that the charges for coverages shall be itemized
and be ancillary to a rental transaction. The sale of insurance not in
conjunction with a rental transaction shall not be permitted.
SECTION 13.
RENTAL COMPANY SHALL NOT
ACT AS A LICENSED INSURER, AGENT OR BROKER
No limited licensee under this subsection shall advertise,
represent, or otherwise hold itself or any of its employees out as licensed
insurers, insurance agents or insurance brokers.
INSTRUCTIONS FOR RENTAL CAR COMPANY APPLICATION FOR
LICENSE
1. Complete form AR-RC
(8-99). All lines of questions 1-3 must be completed. If information is not
provided the application will be returned unprocessed.
2. The information provided in question No.
4. must agree with the number of offices listed.
3. The application must be signed and dated
by an officer of the rental car company.
4. The application must be notarized and
dated. The application must be received at the Department within thirty (30)
days from the notary date.
5.
Attach a check in the amount of $35.00, made payable to the ARKANSAS INSURANCE
DEPARTMENT TRUST FUND. This check cannot be a temporary bank check but must be
encoded with the name and address of the rental car company. A money order or
cashiers check can be used in lieu of a company check.
6. The application and fee should be
submitted to:
The Arkansas Insurance Department
Licensing Division
1200 West Third Street
Little Rock, AR 72201
Any questions regarding the application should be directed to the
License Division at 501-371-2750.
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