The Arkansas House of Representatives has passed legislation to establish a state-owned captive insurance company to provide property cover for public schools, colleges, universities and state-owned buildings.
House Bill 1821 proposes consolidating existing property insurance programmes under a single captive structure managed by the Department of Transformation and Shared Services.
Participation would be mandatory for all public entities receiving state appropriations for facilities, ensuring a unified risk pool and centralised oversight.
The captive will be responsible for setting actuarially sound premiums, maintaining reserve balances, and managing claims across the covered institutions.
The bill includes a ban on the use of public insurance adjusters in property claims, reinforcing the state’s goal of maintaining internal control over the process.
In addition, an emergency clause highlights the current volatility and unsustainability of the commercial property insurance market as key drivers for the reform.
Operations are slated to begin by December 2025, with a phased transfer of existing policies and liabilities into the new captive structure.
The legislation is sponsored by Senator Ben Gilmore and Representative Jeff Wardlaw, and has attracted bipartisan backing.
A companion measure, Senate Bill 481, has been referred to the Senate Insurance & Commerce Committee for review.
Proponents say the captive model will offer long-term premium stability and improved risk management for public institutions, while critics have raised concerns over governance and transition logistics.
