Arkansas Surplus Lines Insurance Broker/Producer Bond Requirements
Who needs this bond?
To get a surplus lines insurance broker or producer license from the Arkansas Insurance Department, you will need to submit a $50,000 surplus line broker bond.
You need to post this bond along with fulfilling other licensing requirements such as a pre-licensing examination.
Why is this bond required?
Surplus lines insurance brokers and producers need to be bonded as a guarantee that they will comply with the Code of Arkansas, and all its provisions.
The bond also functions as protection to brokers’ and producers’ clients. If the latter suffer any losses due to the malpractice, dishonesty, fraud of the former, they can file a claim to receive compensation. The amount of compensation that the surety may extend to claimants can be as high as the full penal sum of the bond.
Looking for more information about how bonds work? Our ‘What is a surety bond’ guide can provide you with a full overview of what bonds are, how they work, and why you need one.
You can find more information in the sections that follow about the cost of this bond, how bond claims occur, and how to apply to get bonded.
To request more information about the bonding requirements for Arkansas surplus lines insurance brokers and producers, call us at 866.450.3412!
What’s the Cost of the Arkansas Surplus Lines Insurance Broker/Producer Bond?
Which factors determine bond cost?
Your surety bond cost, or bond premium, is equal to a percentage of the total amount ($50,000) of your bond. That percentage is primarily influenced by the strength of your credit score. The higher your score, the lower your premium is likely to be.
A number of other factors also influence bond cost. These are:
- Your business financials
- Your personal financials
- Your liquidity and assets
- Your personal resume and industry experience
How much will my bond cost?
Applicants who have a credit score of 700 FICO or above are usually offered some of the lowest possible rates. Their rates may vary between 0.75% and 1.5% of their bond amount.
Applicants who have a credit score that’s slightly lower than 700 FICO, will usually be offered a rate above 1.5% and up to 5%.
Get a quick estimate of the cost of your bond by using our bond calculator below. You can also have a look at the table providing ranges of bond rates, based on your credit score.
Surety Bond Cost Calculator
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|Surety bond name||Surety bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Arkansas Surplus Lines Insurance Broker/Producer Bond||$50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$3,750|
What if I have bad credit?
Even if you have bad credit, you are still eligible to obtain a bond. Rates under our Bad Credit Program are higher than those for applicants with better scores. This is so because sureties perceive a greater risk in extending bonds to applicants with lower scores.
You can expect to be offered a quote above 5%, though bond rates are determined on a case-by-case basis. By improving your credit score over time, you can also easily improve your bond rate.
When Do Bond Claims Occur?
What does the bond guarantee?
The bond form for surplus lines insurance brokers and producers in Arkansas states that the bond guarantees that they will “well and truly comply with the laws of the State of Arkansas pertaining to Surplus Lines Insurance Broker”.
The law that applies to them, in particular, is Tit. 23, Subtit. 3, Ch. 65, Subch. 3 of the Arkansas Code Annotated, also known as the Surplus Lines Insurance Law. The law specifically also states that apart from guaranteeing full compliance, the bond is also put in place to guarantee that bonded licensees will remit taxes as required by the law.
What gives rise to a claim?
Violating any of the above conditions may lead to a claim being filed against your bond. When a claim is filed, the surety that backs your bond will investigate the case to determine its veracity, as well as to determine the amount of compensation it should extend. Such compensation may be as high as the full amount of the bond.
Though your surety may extend compensation, you must know that you are ultimately liable for any claims made against your bond. For this reason, it is best that you avoid giving rise to situations under which a claim can be filed.
Apply for Your Bond Here!
Get started with your bond application by completing our bond form. You’ll then receive an exact and entirely free quote from us, along with further instructions on finalizing the application process.
Your bond will be issued in no more than two working days. After that, we’ll mail it to you by standard mail and email.
You can reach us at 866.450.3412 if you want to know more about this or other bonds.
Useful Resources for Arkansas Surplus Lines Insurance Brokers
- Arkansas Insurance Department Licensing Section
- Arkansas Insurance Licensing Candidate Handbook
- Arkansas Surplus Lines Insurance Law