Arkansas Code
Chapter 101 - Creditor-Placed Insurance
§ 23-101-113. Disclosures to debtor

(a) A creditor shall not impose charges, including premium costs and related interest and finance charges, on a debtor for creditor-placed insurance coverage unless adequate disclosure of the requirement to maintain insurance has been made to the debtor. Adequate disclosure is accomplished if the following occurs:
(1) The credit agreement sets forth the requirement that the debtor must maintain insurance on the collateral as provided for in § 23-101-111;
(2) The creditor makes reasonable efforts to notify the debtor of the requirement to maintain insurance and allows a reasonable time for compliance with this requirement;
(3) A final notice as required by this chapter is sent to the debtor; and
(4) If creditor-placed insurance coverage is issued, a copy of the policy or certificate is sent to the debtor as provided for in § 23-101-107.

(b)
(1) After adequate disclosure of the request to maintain insurance has been made to the debtor as required by this section, a creditor may proceed to impose charges for creditor-placed insurance if the debtor fails to provide evidence of insurance.
(2) A creditor may impose charges no earlier than ten (10) calendar days after sending the final notice.

(c) Reasonable efforts to notify the debtor are accomplished if:
(1) The creditor mails a notice by first class mail to the debtor's last known address as contained in the creditor's records, stating that the creditor intends to charge the debtor for creditor-placed insurance coverage on the collateral if the debtor fails to provide evidence of the property insurance to the creditor;
(2) The creditor allows the debtor at least twenty (20) calendar days to respond to the notice and provide evidence of acceptable insurance coverage before sending a final notice; and
(3)
(A) The creditor sends a final notice in compliance with this section by first class mail to the debtor's last known address as contained in the creditor's records at least ten (10) calendar days before the cost of insurance is charged to the debtor by the creditor.
(B) Proof of the mailing of the final notice shall be retained for at least three (3) years following the expiration or termination of the coverage or as otherwise required by law.

(d) The initial notice shall be in a form determined by the creditor to remind the debtor of the requirement to maintain insurance on the collateral. The final notice shall be as complete as the following notice, printed in not less than 12-point type, and modified when necessary to fit the nature of the credit transaction:
(e)
(1) All creditor-placed insurance shall be set forth in an individual policy or certificate of insurance.
(2) Not earlier than the sending of the final notice nor fifteen (15) days after a charge is made to the debtor for creditor-placed insurance coverage, the creditor shall cause a copy of the individual policy, certificate, or other evidence of insurance coverage evidencing the creditor-placed insurance coverage to be sent, first class mail, to the debtor's last known address.

(f) A creditor's compliance with or failure to comply with this chapter shall not be construed to require the creditor to purchase insurance coverage on the collateral, and the creditor shall not be liable to the debtor or a third party as a result of its failure to purchase the insurance.
“FINAL NOTICE Your credit agreement with us requires you to have property insurance on the collateral until you pay off your loan. You have not given us proof you have insurance on the property. You can ask your insurance company or agent to give us proof of insurance or you can send us proof you have property insurance within ten (10) calendar days after the date this letter was postmarked. If you do not, we may buy the insurance and charge the cost to you. You must pay for the property insurance we buy. It will probably cost more than insurance you can buy on your own. The cost of the insurance we buy may be added to your loan balance and we may charge you interest on it. If we do, you will pay interest at the same rate you pay on your loan or the highest rate permitted by law, whichever is lower. The insurance we buy will pay claims to us (the creditor) for physical damage to your property, at a minimum, the least of the following, determined as of the date of loss: (a) the cost to repair the collateral less any applicable deductible; (b) the actual cash value of the collateral, less any applicable deductible; (c) the net debt, less any applicable deductible. It will not pay any claims made against you [and it may not pay you for any claims you make (delete if limited dual interest coverage)]. The insurance we buy will not give you any liability insurance coverage and will not meet the requirements of a state's financial responsibility law. The property coverage we buy will start on the date shown in the policy or certificate, which may go back to the date of the loan or the date your prior coverage stopped. We will cancel the insurance we bought for you and give you a refund or credit of unearned charges if you give us proof you have bought property insurance somewhere else or if you have paid off the loan.”
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