(a)

(1) There is created a nonprofit legal entity to be known as the "Arkansas Life and Health Insurance Guaranty Association". All member insurers shall be and remain members of the association as a condition of their authority to transact insurance in this state. The association shall perform its functions under the plan of operation established and approved under § 23-96-116 and shall exercise its powers through a board of directors established under subsection (b) of this section.

(2) The association shall come under the immediate supervision of the Insurance Commissioner and shall be subject to the applicable provisions of the insurance laws of this state. Meetings or records of the association may be opened to the public upon majority vote of the Board of Directors of the Arkansas Life and Health Insurance Guaranty Association.

(3) The association shall be subject to examination and regulation by the commissioner.

(4) The board shall submit to the commissioner each year, not later than one hundred twenty (120) days after the association's fiscal year, a financial report in a form approved by the commissioner and a report of its activities during the preceding fiscal year. Upon request of a member insurer, the association shall provide the member insurer with a copy of the report.

(5) For purposes of administration and assessment, the association shall maintain two (2) accounts:

(A) The life insurance and annuity account, which includes the following subaccounts:

(i) Life insurance account;

(ii) Annuity account, which shall include annuity contracts owned by a governmental retirement plan, or its trustee, established under section 401(k), section 403(b), or section 457 of the Internal Revenue Code, but shall otherwise exclude unallocated annuities; and

(iii) Unallocated annuity account, which shall exclude contracts owned by a governmental retirement benefit plan, or its trustee, established under section 401(k), section 403(b), or section 457 of the Internal Revenue Code;

(B) The accident and health insurance account.

(6) The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions, except taxes levied on real property.

(b) (1) (A) The board shall consist of not less than five (5) nor more than nine (9) member insurers serving terms as established in the plan of operation.

(B) The members of the board shall be selected by member insurers subject to the approval of the commissioner.

(C) Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the commissioner.

(2) In approving selections to the board, the commissioner shall consider, among other things, whether all member insurers are fairly represented.

(3) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board, but members of the board shall not otherwise be compensated by the association for their services.