Oversight subcommittee approves RFQ to find auditor for Arkansas state captive insurance program

The State Insurance Programs Oversight Subcommittee of the Arkansas Legislative Council voted to allow the Office of Property Risk to use a Request for Qualifications (RFQ) to procure independent auditing services for the state captive insurance program. Grant Wallace, director of the Employee Benefits Division and Office of Property Risk, introduced the request and said the governing statute that created the captive "does require us to get an independent audit."

Wallace told the committee the RFQ route is preferred because the captive is a specialized entity and the applicable accounting framework is Financial Accounting Standards Board rules, which are outside the scope of legislative audit. "The uniqueness of the captive program" and the specialized nature of the work were offered as reasons the RFQ process would better identify qualified firms.

Committee members pressed staff on procurement details. The chair asked whether an anticipated cost must be included in the RFQ; Wallace said an amount must be entered as part of the approval checklist. Senator Hickey asked whether the contract covers a four‑year term; Wallace confirmed the initial term would run four years. Hickey asked whether the figure discussed was an annual amount or the total for the four years; Wallace said "the total projected cost would be for the full term," and Hickey then stated, "So we're talking about 210,000 a year." The transcript does not record a staff confirmation of that annual figure.

Representative Ladyman asked how market research was done and whether Arkansas firms could be favored. Wallace said the search was nationwide, focusing on firms with insurance experience and familiarity with FASB standards, and that RFQ criteria could include meeting or physical‑presence requirements or other scoring bonuses to give an advantage to locally operating firms. Ladyman said she supported giving Arkansas companies an advantage when qualifications are comparable.

Wallace told members that after a winner is selected the contract would still need approval from the State Board of Finance and the full Arkansas Legislative Council before the state could execute the engagement. The subcommittee voted by voice to permit use of the RFQ process; Representative Beatty indicated he made the motion. The transcript records the voice vote as "Aye" and the chair announced "Motion carries."

Next steps: staff will proceed with the RFQ process; any recommended award would be forwarded to the State Board of Finance and then to the full Arkansas Legislative Council for final approval before the contract is executed.