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Committee backs bill to define and regulate online marketplace guarantees; insurers warn it may be insurance in disguise
Summary
Senate committee passed a bill establishing a regulatory framework for "online marketplace guarantees" (products such as Airbnbhost guarantees). Insurance trade groups opposed, arguing the guarantees shift risk and should be regulated as insurance; the insurance commissioner said he will follow the legislature's determination.
The committee advanced legislation to create a statutory framework for online marketplace guarantees, a product used by platforms to provide limited protection to hosts and sellers for guest damage or similar incidents.
Sen. Justin Boyd introduced the bill and witnesses described guarantees as incidental, low‑dollar protections typical of marketplace terms of service. Byron Wobeter, associate general counsel for Airbnb, explained that the guarantee is usually a separate, incidental promise to a host and not underwritten as a traditional insurance product.
Insurance trade representatives urged caution. Ward Tisdale of the National Association of Mutual Insurance Companies warned a recent Wisconsin memorandum concluded some marketplace guarantees function like insurance: "insurance is a contract that shifts the risk of loss in exchange for premium," he said, and recommended that Arkansas wait for broader national model language from NCOIL before enacting a state law. APCIA (property/casualty insurers) and NAMIC representatives said the draft is premature and risks creating an unlevel playing field if functionally identical risk‑shifting products escape insurance regulation.
Insurance Commissioner Al MacLean testified that the department had not taken a formal position and that he will follow the legislature"if y'all say it's not insurance, then that's what I, as a regulator, will, you know, go by." Committee members discussed NCOIL model development and whether Arkansas should wait for a national consensus; the sponsor argued Arkansas law and case law permit clarifying statutes now.
The committee passed the bill by voice vote after adopting amendments; transcript testimony shows industry opposition but stops short of a roll‑call tally in the committee record.
