(a) No license shall be issued for any taxicab, automobile, or similar vehicle used for hire, nor shall these vehicles be operated or used in and upon the streets, roads, and highways of the State of Arkansas, within or without the corporate limits of any city or village, for the purpose of carrying passengers for hire unless there shall have been filed with the Director of the Department of Finance and Administration a liability contract of insurance, or certificates of insurance, issued to the owner of the vehicle, which shall be substantially in the form of the standard automobile liability insurance policy in customary use, to be approved by the director, and issued by an insurance company licensed to do business in the State of Arkansas.

(b) The policy shall secure payment in accordance with the provisions thereof to any person except employees or joint venturers of the owner for personal injuries to that person and for any damage to property except property owned by, rented to, leased to, in charge of, or transported by the owner, other than baggage of passengers, caused by the operation of a taxicab, automobile, or similar vehicle used for hire for at least the minimum amounts prescribed for liability insurance under the Motor Vehicle Safety Responsibility Act, § 27-19-101 et seq.

(c)

(1) In lieu of the policy of insurance, an owner may file a bond by some solvent surety company licensed to do business in this state or may file a bond by suitable collateral.

(2)

(A) The bond or collateral shall be in the form approved by the director and shall be conditioned for the payment of property damage and personal injuries and shall be in an amount no less than fifty thousand dollars ($50,000) for all claims for the operator's fleet, and uninsured motorist coverage shall not be required of the operators.

(B) If the bond or collateral becomes insufficient because of claims or any other reason, the operator shall have seven (7) days to restore it to the full amount or lose its bonded status.

(d) In lieu of the policy of insurance or bond, an owner may provide self-insurance as authorized under § 27-19-107.

(e)

(1) No policy of insurance may be cancelled by the licensee or by the insurance carrier unless written notice of the cancellation shall have been mailed to the director.

(2) The written notice shall state the exact time and date of cancellation to be not less than seven (7) days from the date of mailing.

(3) The mailing of notice shall be sufficient proof of notice, and the effective date of cancellation stated in the notice shall become the end of the policy period.

(f) Any individual or corporation engaged in the operation of a taxicab, etc., as a common carrier of passengers for hire who violates this section or who procures, aids, or abets any individual or corporation in violating this section shall, upon conviction, be guilty of a Class B misdemeanor.

(g)

(1) Notwithstanding any other provision of state law, any municipality in a county with a population in excess of two hundred thousand (200,000) that requires a franchise for taxicabs to operate within the corporate limits of the municipality may impose any insurance requirements desired by the municipality that shall be applicable to any taxicab that operates within the municipality.

(2) If a municipality imposes such insurance requirements on its taxicabs, it shall be unlawful for any taxicab operator to operate a taxicab within the corporate limits of that municipality without meeting such insurance requirements. Any person found guilty or who pleads guilty or nolo contendere to a charge of violating this subsection shall be subject to a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500).

(3) In addition to penalties that may be assessed against the taxicab operator, if the taxicab owner is a different person or entity, the owner shall be subject to a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500).

(4) A municipality may, by ordinance, declare that an uninsured taxicab shall be subject to seizure and that a seized taxicab shall not be released until such insurance is in place.