Arkansas Marketing Rules, Ethics & Unfair Practices
The final state topic covers how a Arkansas producer must behave in the market: the prohibited unfair trade practices, the duty to handle client money properly, and the advertising and disclosure standards that keep sales honest. Most of these rules come from the state's unfair trade practices law and related department rules.
Unfair Trade Practices
Arkansas's unfair trade practices law lists prohibited methods of competition and deceptive acts in the business of insurance. Prohibited conduct includes misrepresentation of policy terms, false or misleading advertising, unfair discrimination between similar risks, defamation of an insurer, coercion, and deceptive claim practices. Violations can lead to fines and license suspension or revocation by the department.
Rebating, Twisting, and Churning
Rebating (offering any part of the premium or commission, or other valuable consideration, as an inducement to buy) is prohibited in Arkansas. Twisting is using misrepresentation to induce a policyholder to drop an existing policy for a new one; churning is a similar replacement abuse involving the same insurer's policies. All are barred because they harm consumers and create unfair discrimination among policyholders.
Fiduciary Duty and Handling Client Funds
Premiums a producer collects belong to the insurer or the client, not to the producer. Arkansas treats this as a fiduciary responsibility: funds must be remitted properly and not commingled or converted for personal use. Failing to account for premiums, or misappropriating client money, is grounds for discipline and can also be a crime. Accurate records and honest disclosure are the core of market-conduct compliance.
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State-specific details
State exam facts
- State regulator
- Arkansas Insurance Department
- Exam vendor
- PSI
- Prelicensing education
- 20 hours per line of authority
- Passing score
- 70%
Who regulates life & health insurance licensing in Arkansas?
The Arkansas Insurance Department (AID) licenses producers and contracts with PSI Services to administer the Life & Health producer examinations.
Does Arkansas require prelicensing education for the life & health exam?
Yes. Arkansas requires 20 hours of prelicensing education per line of authority, completed before you take the state licensing exam.
How is the Arkansas life & health exam administered?
The exam is delivered by PSI Services, with separate Life and Health sections, each requiring a 70% passing standard.
Sources: https://insurance.arkansas.gov/site/assets/files/1744/psi_exam_handbook.pdf, https://www.psiexams.com/
In the Arkansas Life & Health Insurance Producer Exam guide: A KEY CONCEPT box, a Common Traps list and a Check Yourself set closing each of the 9 national chapters. Practice here stays free.