How often must the commissioner examine the financial affairs of each admitted insurer operating in Arkansas?

The financial affairs of each admitted insurer operating in Arkansas must be examined by the commissioner at least once every five years. This requirement is established to ensure that insurers remain financially sound and are adhering to the regulations that protect consumers and maintain the stability of the insurance market. Regular examinations allow the commissioner to assess the financial health of the insurers, their adherence to statutory requirements, and any potential risks that could affect their ability to fulfill obligations to policyholders.

Other time frames would not meet the regulatory needs for oversight. For instance, a three-year interval might not provide sufficient scrutiny given the complexities of financial operations in the insurance industry, while a seven or ten-year interval could be too long to promptly catch any financial issues that might arise, potentially jeopardizing the interests of policyholders. Thus, the five-year examination cycle strikes a balance between thorough oversight and operational feasibility for the Insurers.