Arkansas Code
Chapter 90 - Arkansas Property And Casualty Insurance Guaranty Act
§ 23-90-116. Duties of receiver

(a)
(1) Covered claims against an insolvent insurer placed in temporary or permanent receivership under an order of liquidation, rehabilitation, or conservation by a court of competent jurisdiction shall be processed and acted upon by the receiver or ancillary receiver in the same manner as other claims as provided in §§ 23-68-101 — 23-68-113 and 23-68-115 — 23-68-132 and as ordered by the court in which the receivership is pending.
(2) However, the funds received from assessments shall be liable only for the difference between the amount of the covered claims approved by the receiver and the amount of the assets marshalled by the receiver for payment to holders of covered claims, and, in ancillary receiverships in this state, funds received from assessments shall be liable only for the difference between the amount of the covered claims approved by the ancillary receiver and the amount of assets marshalled by the receivers in other states for application to payment of covered claims within this state.
(3) Funds received from assessments shall not be liable for any amount over and above that approved by the receiver for a covered claim, and any action brought by the holder of the covered claim appealing from the receiver's action shall not increase the liability of the funds, provided that the receiver may review his or her action in approving a covered claim and for just cause modify the approval at any time during the pendency of the receivership.

(b)
(1) If a receiver is appointed to handle the affairs of an insolvent insurer, the receiver shall determine whether or not covered claims should or can be provided for in whole or in part by reinsurance, assumption, or substitution.
(2)
(A) Upon determination by the receiver that actual payment of covered claims should be made, the receiver shall give notice of the determination to claimants falling within the class of covered claims.
(B) The receiver shall mail the notice to the latest address reflected in the records of the insolvent insurer.
(C) If the records of the insolvent insurer do not reflect the address of a claimant, the receiver may give notice by publication in a newspaper of general circulation.
(D) This notice shall state the time within which the claimant must file his or her claim with the receiver, which time shall in no event be less than ninety (90) days from the date of the mailing or publication of the notice.

(3) The receiver may require, in whole or in part, that sworn claim forms be filed and may require that additional information or evidence be filed as may be reasonably necessary for the receiver to determine the legality or the amount due under a covered claim.

(c)
(1) Upon determination by the receiver that actual payment of covered claims should be made or upon order of the court to the receiver to give notice for the filing of claims, any person who has a cause of action against an insured of the insolvent insurer under a liability insurance policy issued or assumed by the insurer, if the cause of action meets the definition of covered claim, shall have the right to file a claim with the receiver regardless of the fact that the claim may be contingent, and this claim may be approved as a covered claim if:
(A) It may be reasonably inferred from the proof presented upon the claim that the person would be able to obtain a judgment upon the cause of action against the insured;
(B) The person furnishes suitable proof that no further valid claims against the insurer arising out of his or her cause of action other than those already presented can be made; and
(C) The total liability of the insurer to all claimants arising out of the same act of its insured is no greater than its total liability would be were it not in liquidation, rehabilitation, or conservation.

(2) In the proceedings of considering covered claims, no judgment against an insured taken after the date of the commencement of the delinquency proceedings or the appointment of a receiver shall be considered as evidence of liability or of the amount of damages, and no judgment against an insured taken by default or by collusion prior to the commencement of the delinquency proceedings or the appointment of a receiver shall be considered as conclusive evidence either of the liability of the insured to the person upon the cause of action or of the amount of damages to which the person is therein entitled.

(d) The acceptance of payment from the receiver by the holder of a covered claim or the acceptance of the benefits of contracts negotiated by the receiver providing for reinsurance or assumption of liabilities or for substitution shall constitute an assignment to the insolvent insurer of any cause of action or right of the holder of the covered claim arising from the occurrence upon which the covered claim is based. The assignment shall be to the extent of the amount accepted or the value of the benefits provided by the contracts of reinsurance or assumption of liabilities or substitution.