Ala. Code § 27-3-29 — Alabama Code / Title 27 / Chapter 3 / Section 27-3-29
Section 27-3-29 Protection of State Insurers Against Foreign Discriminatory or Onerous Requirements
Status: in_force

(a) The purpose of this section is to aid in the protection of insurers formed under the laws of Alabama and transacting insurance in other states or countries against discriminatory or onerous requirements under the laws of such states or countries or the administration thereof.

(b) When by or pursuant to the laws of any other state or foreign country, any taxes, licenses, and other fees, in the aggregate, and any fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions are, or would be, imposed upon Alabama insurers, or upon the agents or representatives of such insurers, which are in excess of such taxes, licenses, and other fees, in the aggregate, or which are in excess of the fines, penalties, deposit requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon the agents or representatives of such insurers, of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses, and other fees, in the aggregate, or fines, penalties, or deposit requirements or other material obligations, prohibitions, or restrictions, of whatever kind, shall be imposed by the commissioner upon the insurers, or upon the agents or representatives of such insurers, of such other state or country doing business or seeking to do business in Alabama. Any tax, license, or other fee or other obligation imposed by any city, county, or other political subdivision or agency of such other state or country on Alabama insurers, or their agents or representatives, shall be deemed to be imposed by such state or country within the meaning of this section.

(c) This section shall not apply as to personal income taxes, nor as to ad valorem taxes on real or personal property, nor as to special purpose obligations or assessments imposed by another state in connection with particular kinds of insurance, other than property insurance; except, that deductions from premium taxes or other taxes otherwise payable allowed on account of real estate or personal property taxes paid shall be taken into consideration by the commissioner in determining the propriety and extent of retaliatory action under this section.

(d) For the purposes of this section, the domicile of an alien insurer, other than insurers formed under the laws of Canada or a province thereof, shall be that state designated by the insurer in writing filed with the commissioner at time of admission to this state or within six months after the effective date of this title, whichever date is the later, and may be any one of the following states:

(1) That in which the insurer was first authorized to transact insurance;

(2) That in which is located the insurer’s principal place of business in the United States; or

(3) That in which is held the larger deposit of trusteed assets of the insurer for the protection of its policyholders or policyholders and creditors in the United States.

If the insurer makes no such designation its domicile shall be deemed to be that state in which is located its principal place of business in the United States.

(e) In the case of an insurer formed under the laws of Canada or a province thereof, its domicile shall be deemed to be that province in which is located its head office.
Ala. Code § 27-44-14 — Alabama Code / Title 27 / Chapter 44 / Section 27-44-14
Section 27-44-14 Liability of Unpaid Assessments; Records of Negotiations and Meetings; Association Deemed Creditor of Impaired or Insolvent Insurer; Judicial Distribution of Ownership Rights of Insolvent Insurer; Recovery by Receiver of Certain Distributions from Controlling Affiliates
Status: in_force

(a) Nothing in this chapter shall be construed to reduce the liability for unpaid assessments of the insureds on an impaired or insolvent insurer operating under a plan with assessment liability.

(b) Records shall be kept of all negotiations and meetings in which the association or its representatives are involved to discuss the activities of the association in carrying out its powers and duties under Section 27-44-8. Records of such negotiations or meetings shall be made public only upon the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer, upon the termination of the impairment or insolvency of the insurer, or upon the order of a court of competent jurisdiction. Nothing in this subsection shall limit the duty of the association to render a report of its activities under Section 27-44-15.

(c) For the purpose of carrying out its obligations under this chapter, the association shall be deemed to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the association is entitled as subrogee pursuant to Section 27-44-8(8). Assets of the impaired or insolvent insurer attributable to covered policies shall be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this chapter. Assets attributable to covered policies, as used in this subsection, are that proportion of the assets which the reserves that should have been established for such policies bear to the reserves that should have been established for all policies of insurance written by the impaired or insolvent insurer.

(d)(1) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders and policyowners of the insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of such insolvent insurer. In such a determination consideration shall be given to the welfare of the policyholders of the continuing or successor insurer.

(2) No distribution to stockholders, if any, of an impaired or insolvent insurer shall be made until and unless the total amount of valid claims of the association for funds expended in carrying out its powers and duties under Section 27-44-8 with respect to such insurer have been fully recovered by the association.

(e)(1) If an order for liquidation or rehabilitation of an insurer domiciled in this state has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the insurer on its capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation subject to the limitations of subdivisions (2) to (4) of this subsection.

(2) No such dividend shall be recoverable if the insurer shows that when paid the distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.

(3) Any person who was an affiliate that controlled the insurer at the time the distributions were paid shall be liable up to the amount of distributions he received. Any person who was an affiliate that controlled the insurer at the time the distributions were declared, shall be liable up to the amount of distributions he would have received if they had been paid immediately. If two persons are liable with respect to the same distributions, they shall be jointly and severally liable.

(4) The maximum amount recoverable under this subsection shall be the amount needed in excess of all other available assets of the insolvent insurer to pay the contractual obligations of the insolvent insurer.

(5) If any person liable under subdivision (3) of this subsection is insolvent, all its affiliates that controlled it at the time the dividend was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.
Ala. Code § 27-31E-3 — Alabama Code / Title 27 / Chapter 31E / Section 27-31E-3
Section 27-31E-3 Eligibility; Use of Grants; Confidentiality
Status: in_force

(a) To be eligible for a grant, residential property owners applying for a grant must have an insurable property that has been granted a homestead exemption and must be able to meet the eligibility requirements as set forth by the department for each grant type.

(b) Grants to residential property owners must be used to retrofit an insurable property as defined in Section 27-31D-3, to resist loss due to hurricane, tornado, or other catastrophic windstorm events as prescribed in subsection (b) of Section 27-31D-2.

(c) Documents, materials, and other information submitted to the department by property owners or insurance companies in support of a grant application shall be subject to the confidentiality provisions of subsection (g) of Section 27-2-24, provided that the amount of any grant awarded and the name of the recipient of the grant awarded shall be available for public disclosure.
Ala. Code § 27-15-77 — Alabama Code / Title 27 / Chapter 15 / Section 27-15-77
Section 27-15-77 Calculation of Adjusted Premiums - Industrial Policies
Status: in_force

(a) This section shall not apply to industrial policies to be issued on or after the operative date of Section 27-15-78, as defined therein.

(b) The adjusted premiums and present values referred to in this article for all policies of industrial insurance shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; provided, that such rate of interest shall not exceed three and one-half percent per annum; provided further, that a rate of interest not exceeding four percent per annum may be used for policies issued on or after August 23, 1976, and prior to July 30, 1979, and a rate of interest not exceeding five and one-half percent per annum may be used for policies issued on or after July 30, 1979; provided, however, that, in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed in the case of industrial policies, may not be more than those shown in the Commissioners 1961 Industrial Extended Term Insurance Table; provided further, that, for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the commissioner.
Ala. Code § 27-31B-15 — Alabama Code / Title 27 / Chapter 31B / Section 27-31B-15
Section 27-31B-15 Exemption from Compulsory Associations
Status: in_force

No captive insurance company, including a captive insurance company organized as a reciprocal insurer under this chapter, may join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this state. No captive insurance company, or its insured, or its parent or any affiliated company, or any member organization of its association or, in the case of a captive insurance company organized as a reciprocal insurer, any subscriber thereof, may receive any benefit from any plan, pool, association, or guaranty or insolvency fund for claims arising out of the operations of the captive insurance company.
Ala. Code § 27-17-3 — Alabama Code / Title 27 / Chapter 17 / Section 27-17-3
Section 27-17-3 Policy Provisions - Grace Period
Status: in_force

There shall be a provision that the insured is entitled to a grace period of four weeks within which the payment of any premium after the first may be made, except, that, in policies the premiums which are payable monthly or less often, the period of grace shall be one month but not less than 30 days, and that during the period of grace the policy shall continue in full force, but if during the grace period the policy becomes a claim, then any overdue premiums may be deducted from any cash payment which may be due under the policy.
Ala. Code § 27-49-5 — Alabama Code / Title 27 / Chapter 49 / Section 27-49-5
Section 27-49-5 Penalties
Status: in_force

Any violation of this chapter shall constitute grounds for suspension or revocation of a license by the Department of Insurance issued to an insurance company or health maintenance organization.
Ala. Code § 27-44-8 — Alabama Code / Title 27 / Chapter 44 / Section 27-44-8
Section 27-44-8 Powers and Duties of Association
Status: in_force

(a) If a member insurer is an impaired insurer, the association may, in its discretion and subject to any conditions imposed by the association that do not impair the contractual obligations of the impaired insurer, and that are approved by the commissioner:

(1) Guarantee or reinsure, or cause to be guaranteed, assumed, or reinsured, any or all of the covered policies of the impaired insurers.

(2) Provide such moneys, pledges, notes, guarantees, or other means as are proper to effectuate subdivision (1), and assure payment of the contractual obligations of the impaired insurer pending action under subdivision (1).

(b) If a member insurer is an insolvent insurer, the association shall, in its discretion and subject to the approval of the commissioner, do either of the following:

(1)a. Guarantee, assume, or reinsure, or cause to be guaranteed, assumed, or reinsured, the covered policies of the insolvent insurer.

b. Assure payment of the contractual obligations of the insolvent insurer.

c. Provide such moneys, pledges, notes, guarantees, or other means as are reasonably necessary to discharge such duties.

(2) Provide benefits and coverages in accordance with the following provisions:

a. With respect to life and disability insurance policies and annuities, assure payment of benefits for premiums identical to the premiums and benefits, except for terms of conversion and renewability, that would have been payable under the policies or contracts of the insolvent insurer, for claims incurred:

1. With respect to group policies and contracts, not later than the earlier of the next renewal date under those policies or contracts or 45 days, but in no event less than 30 days, after the date on which the association becomes obligated with respect to the policies and contracts.

2. With respect to non-group policies, contracts, and annuities not later than the earlier of the next renewal date, if any, under the policies or contracts or one year, but in no event less than 30 days, from the date on which the association becomes obligated with respect to the policies or contracts.

b. Make diligent efforts to provide all known insureds or annuitants (for non-group policies and contracts), or group policy owners with respect to group policies and contracts, 30 days’ notice of the termination (pursuant to paragraph a.) of the benefits provided.

c. With respect to non-group life and disability insurance policies and annuities covered by the association, make available to each known insured or annuitant, or owner if other than the insured or annuitant, and with respect to an individual formerly insured or formerly an annuitant under a group policy who is not eligible for replacement group coverage, make available substitute coverage on an individual basis in accordance with the provisions of paragraph d., if the insureds or annuitants had a right under law or the terminated policy or annuity to convert coverage to individual coverage or to continue an individual policy or annuity in force until a specified age or for a specified time, during which the insurer had no right unilaterally to make changes in any provision of the policy or annuity or had a right only to make changes in premium by class.

d.1. In providing the substitute coverage required under paragraph c., the association may offer either to reissue the terminated coverage or to issue an alternative policy.

2. Alternative or reissued policies shall be offered without requiring evidence of insurability, and shall not provide for any waiting period or exclusion that would not have applied under the terminated policy.

3. The association may reinsure any alternative or reissued policy.

e.1. Alternative policies adopted by the association shall be subject to the approval of the commissioner. The association may adopt alternative policies of various types for future issuance without regard to any particular impairment or insolvency.

2. Alternative policies shall contain at least the minimum statutory provisions required in this state and provide benefits that shall not be unreasonable in relation to the premium charged. The association shall set the premium in accordance with a table of rates that it shall adopt. The premium shall reflect the amount of insurance to be provided and the age and class of risk of each insured, but shall not reflect any changes in the health of the insured after the original policy was last underwritten.

3. Any alternative policy issued by the association shall provide coverage of a type similar to that of the policy issued by the impaired or insolvent insurer, as determined by the association.

f. If the association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy, the premium shall be set by the association in accordance with the amount of insurance provided and the age and class of risk, subject to approval of the commissioner.

g. The association’s obligations with respect to coverage under any policy of the impaired or insolvent insurer or under any reissued or alternative policy shall cease on the date the coverage or policy is replaced by another similar policy by the policy owner, the insured, or the association.

h. When proceeding under this subdivision (2) with respect to a policy or contract carrying guaranteed minimum interest rates, the association shall assure the payment or crediting of a rate of interest consistent with Section 27-44-3(b)(2)c.

(c) Nonpayment of premiums within 31 days after the date required under the terms of any guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage shall terminate the association’s obligations under the policy or coverage under this chapter with respect to the policy or coverage, except with respect to any claims incurred or any net cash surrender value which may be due in accordance with the provisions of this chapter.

(d) Premiums due for coverage after entry of an order of liquidation of an insolvent insurer shall belong to and be payable at the direction of the association. If the liquidator of an insolvent insurer requests, the association shall provide a report to the liquidator regarding such premium collected by the association. The association shall be liable for unearned premiums due to policy or contract owners arising after the entry of the order.

(e) The protection provided by this chapter shall not apply where any guaranty protection is provided to residents of this state by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer other than this state.

(f) In carrying out its duties under subsection (b), the association may, subject to approval by a court in this state:

(1) Impose permanent policy or contract liens in connection with any guarantee, assumption, or reinsurance agreement, if the association finds that the amounts which can be assessed under this chapter are less than the amounts needed to assure full and prompt performance of the association’s duties under this chapter, or that the economic or financial conditions as they affect member insurers are sufficiently adverse to render the imposition of such permanent policy or contract liens, to be in the public interest.

(2) Impose temporary moratoriums or liens on payments of cash values and policy loans, or any other right to withdraw funds held in conjunction with policies or contracts, in addition to any contractual provisions for deferral of cash or policy loan values. In addition, in the event of a temporary moratorium or moratorium charge imposed by the receivership court on payment of cash values or policy loans, or on any other right to withdraw funds held in conjunction with policies or contracts, out of the assets of the impaired or insolvent insurer, the association may defer the payment of cash values, policy loans, or other rights by the association for the period of the moratorium or moratorium charge imposed by the receivership court, except for claims covered by the association to be paid in accordance with a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court.

(g) If the association fails to act within a reasonable period of time as provided in subsection (b), the commissioner shall have the powers and duties of the association under this chapter with respect to the insolvent insurer.

(h) The association may render assistance and advice to the commissioner, upon the commissioner’s request, concerning rehabilitation, payment of claims, continuance of coverage, or the performance of other contractual obligations of an impaired or insolvent insurer.

(i) The association shall have standing to appear or intervene before a court or agency in this state with jurisdiction over an impaired or insolvent insurer concerning which the association is or may become obligated under this chapter. Standing shall extend to all matters germane to the powers and duties of the association, including, but not limited to, proposals for reinsuring, modifying, or guaranteeing the policies or contracts of the impaired or insolvent insurer and the determination of the covered policies or contracts and contractual obligations. The association shall also have the right to appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise.

(j)(1) A person receiving benefits under this chapter shall be deemed to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from or otherwise relating to, the covered policy or contract to the association to the extent of the benefits received because of this chapter, whether the benefits are payments of or on account of contractual obligations, continuation of coverage or provision of substitute or alternative coverage. The association may require an assignment to it of such rights by any payee, policy or contract owner, beneficiary, insured or annuitant as a condition precedent to the receipt of any rights or benefits conferred by this chapter upon such person.

(2) The subrogation rights of the association under this subsection shall have the same priority against the assets of the impaired or insolvent insurer as that possessed by the person entitled to receive benefits under this chapter.

(3) In addition to subdivisions (1) and (2), the association shall have all common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or owner, beneficiary, or payee of a policy or contract with respect to the policy or contract.

(4) If the preceding provisions of this subsection are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the association with respect to the related covered obligations shall be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policies, or portion thereof, covered by the association.

(5) If the association has provided benefits with respect to a covered obligation and a person recovers amounts as to which the association has rights as described in the preceding subdivisions of this subsection, the person shall pay to the association the portion of the recovery attributable to the policies, or portion thereof, covered by the association.

(k) In addition to the rights and powers elsewhere in this chapter, the association may:

(1) Enter into such contracts as are necessary or proper to carry out the provisions and purposes of this chapter.

(2) Sue or be sued, including taking any legal actions necessary or proper for recovery of any unpaid assessments under Section 27-44-9 and to settle claims or potential claims against it.

(3) Borrow money to effect the purposes of this chapter. Any notes or other evidence of indebtedness of the association not in default shall be legal investments for domestic insurers and may be carried as admitted assets.

(4) Employ or retain such persons as are necessary to handle the financial transactions of the association, and to perform such other functions as become necessary or proper under this chapter.

(5) Take such legal action as may be necessary to avoid payment of improper claims.

(6) Exercise, for the purposes of this chapter and to the extent approved by the commissioner, the powers of a domestic life or health insurer, but in no case may the association issue insurance policies or annuity contracts other than those issued to perform its obligations under this chapter.

(7) Organize itself as a corporation or in other legal forms permitted by the laws of the state.

(8) Request information from a person seeking coverage from the association in order to aid the association in determining its obligations under this chapter with respect to the person, and the person shall promptly comply with the request.

(9) Take other necessary or appropriate action to discharge its duties and obligations under this chapter or to exercise its powers under this chapter.

(l) The association may join an organization of one or more other state associations of similar purposes, to further the purposes and administer the powers and duties of the association.

(m)(1)a. At any time within 180 days of the date of the order of liquidation, the association may elect to succeed to the rights and obligations of the ceding member insurer that relate to policies or annuities covered, in whole or in part, by the association, in each case under any one or more reinsurance contracts entered into by the insolvent insurer and its reinsurers and selected by the association. Any such assumption shall be effective as of the date of the order of liquidation. The election shall be effected by the association or the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) on its behalf sending written notice, return receipt requested, to the affected reinsurers.

b. To facilitate the earliest practicable decision about whether to assume any of the contracts of reinsurance, and in order to protect the financial position of the estate, the receiver and each reinsurer of the ceding member insurer shall make available upon request to the association or to NOLHGA on its behalf as soon as possible after commencement of formal delinquency proceedings (i) copies of in-force contracts of reinsurance and all related files and records relevant to the determination of whether such contracts should be assumed, and (ii) notices of any defaults under the reinsurance contracts or any known event or condition which with the passage of time could become a default under the reinsurance contracts.

c. The following paragraphs 1. through 4. shall apply to reinsurance contracts so assumed by the association:

1. The association shall be responsible for all unpaid premiums due under the reinsurance contracts for periods both before and after the date of the order of liquidation, and shall be responsible for the performance of all other obligations to be performed after the date of the order of liquidation, in each case which relate to policies or annuities covered, in whole or in part, by the association. The association may charge policies or annuities covered in part by the association, through reasonable allocation methods, the costs for reinsurance in excess of the obligations of the association and shall provide notice and an accounting of these charges to the liquidator.

2. The association shall be entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods after the date of the order of liquidation and that relate to policies or annuities covered, in whole or in part, by the association, provided that, upon receipt of any such amounts, the association shall be obliged to pay to the beneficiary under the policy or annuity on account of which the amounts were paid a portion of the amount equal to the lesser of:

(i) The amount received by the association.

(ii) The excess of the amount received by the association over the amount equal to the benefits paid by the association on account of the policy or annuity less the retention of the insurer applicable to the loss or event.

3. Within 30 days following the association’s election (the “election date”), the association and each reinsurer under contracts assumed by the association shall calculate the net balance due to or from the association under each reinsurance contract as of the election date with respect to policies or annuities covered, in whole or in part, by the association, which calculation shall give full credit to all items paid by either the insurer or its receiver or the reinsurer prior to the election date. The reinsurer shall pay the receiver any amounts due for losses or events prior to the date of the order of liquidation, subject to any set-off for premiums unpaid for periods prior to the date, and the association or reinsurer shall pay any remaining balance due the other, in each case within five days of the completion of the aforementioned calculation. Any disputes over the amounts due to either the association or the reinsurer shall be resolved by arbitration pursuant to the terms of the affected reinsurance contracts or, if the contract contains no arbitration clause, as otherwise provided by law. If the receiver has received any amounts due the association pursuant to subparagraph 2., the receiver shall remit the same to the association as promptly as practicable.

4. If the association or receiver, on the association’s behalf, within 60 days of the election date, pays the unpaid premiums due for periods both before and after the election date that relate to policies or annuities covered, in whole or in part, by the association, the reinsurer shall not be entitled to terminate the reinsurance contracts for failure to pay premium insofar as the reinsurance contracts relate to policies and annuities covered, in whole or in part, by the association, and shall not be entitled to set off any unpaid amounts due under other contracts, or unpaid amounts due from parties other than the association, against amounts due the association.

(2) During the period from the date of the order of liquidation until the election date or, if the election date does not occur, until 180 days after the date of the order of liquidation:

a.1. Neither the association nor the reinsurer shall have any rights or obligations under reinsurance contracts that the association has the right to assume under subdivision (1), whether for periods prior to or after the date of the order of liquidation.

2. The reinsurer, the receiver, and the association shall, to the extent practicable, provide each other data and records reasonably requested.

b. Provided that once the association has elected to assume a reinsurance contract, the parties’ rights and obligations shall be governed by subdivision (1).

(3) If the association does not elect to assume a reinsurance contract by the election date pursuant to subdivision (1), the association shall have no rights or obligations, in each case for periods both before and after the date of the order of liquidation, with respect to the reinsurance contract.

(4) When policies or annuities, or covered obligations with respect thereto, are transferred to an assuming insurer, reinsurance on the policies or annuities may also be transferred by the association, in the case of contracts assumed under subdivision (1), subject to all of the following:

a. Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred shall not cover any new policies of insurance or annuities in addition to those transferred.

b. The obligations described in subdivision (1) shall no longer apply with respect to matters arising after the effective date of the transfer.

c. Notice shall be given in writing, return receipt requested, by the transferring party to the affected reinsurer not less than 30 days prior to the effective date of the transfer.

(5) The provisions of this subsection shall supersede the provisions of any state law or of any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods after the date of the order of liquidation, to the receiver of the insolvent insurer or any other person. The receiver, shall remain entitled to any amount payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods prior to the date of the order of liquidation, subject to applicable setoff provisions.

(6) Except as otherwise provided in this section, nothing in this subsection shall alter or modify the terms and conditions of any reinsurance contract. Nothing in this section shall abrogate or limit any rights of any reinsurer to claim that it is entitled to rescind a reinsurance contract. Nothing in this section shall give a policyholder or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract. Nothing in this section shall limit or affect the association’s rights as a creditor of the estate against the assets of the estate. Nothing in this section shall apply to reinsurance agreements covering property or casualty risks.

(n) The board of directors of the association shall have discretion and may exercise reasonable business judgment to determine the means by which the association is to provide the benefits of this chapter in an economical and efficient manner.

(o) Where the association has arranged or offered to provide the benefits of this chapter to a covered person under a plan or arrangement that fulfills the association’s obligations under this chapter, the person shall not be entitled to benefits from the association in addition to or other than those provided under the plan or arrangement.

(p) Venue in a suit against the association arising under this chapter shall be in Jefferson County, Alabama. The association shall not be required to give an appeal bond in an appeal that relates to a cause of action arising under this chapter.

(q) In carrying out its duties in connection with guaranteeing, assuming, or reinsuring policies or contracts under subsection (a) or (b), the association may, subject to approval of the receivership court, issue substitute coverage for a policy or contract that provides an interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with all of the following provisions:

(1) In lieu of the index or other external reference provided for in the original policy or contract, the alternative policy or contract provides for (i) a fixed interest rate, (ii) payment of dividends with minimum guarantees, or (iii) a different method for calculating interest or changes in value.

(2) There is no requirement for evidence of insurability, waiting period, or other exclusion that would not have applied under the replaced policy or contract.

(3) The alternative policy or contract is substantially similar to the replaced policy or contract in all other material terms.
Ala. Code § 27-2A-3 — Alabama Code / Title 27 / Chapter 2A / Section 27-2A-3
Section 27-2A-3 Materiality; Scope; Information to Be Reported
Status: in_force

(a) Materiality. No acquisitions or dispositions of assets need be reported, pursuant to Section 27-2A-2, if the acquisitions or dispositions are not material. For purposes of this section, a material acquisition (or the aggregate of any series of related acquisitions during any 30-day period) or disposition (or the aggregate of any series of related dispositions during any 30-day period) is one that is nonrecurring and not in the ordinary course of business and involves more than five percent of the reporting insurer’s total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurer’s state of domicile.

(b) Scope.

(1) Asset acquisitions subject to this chapter include every purchase, lease, exchange, merger, consolidation, succession, or other acquisition, other than the construction or development of real property, by or for the reporting insurer or the acquisition of materials for that purpose.

(2) Asset dispositions subject to this chapter include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment, whether for the benefit of creditors or otherwise, abandonment, destruction, or other disposition.

(c) Information to be reported.

(1) The following information is required to be disclosed in any report of a material acquisition or disposition of assets:

a. Date of the transaction.

b. Manner of acquisition or disposition.

c. Description of the assets involved.

d. Nature and amount of the consideration given or received.

e. Purpose of, or reason for, the transaction.

f. Manner by which the amount of consideration was determined.

g. Gain or loss recognized or realized as a result of the transaction.

h. Name of the person from whom the assets were acquired or to whom they were disposed.

(2) Insurers are required to report material acquisitions and dispositions on a nonconsolidated basis, unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurers reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars ($1,000,000) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer’s capital and surplus.
Ala. Code § 27-14-16 — Alabama Code / Title 27 / Chapter 14 / Section 27-14-16
Section 27-14-16 Noncomplying Policies, Riders, and Endorsements
Status: in_force

Any insurance policy, rider, or endorsement hereafter issued and otherwise valid which contains any condition or provision not in compliance with the requirements of this title shall not be thereby rendered invalid but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this title.
Ala. Code § 27-31B-16 — Alabama Code / Title 27 / Chapter 31B / Section 27-31B-16
Section 27-31B-16 Tax on Premiums Collected
Status: in_force

(a) Each captive insurance company shall pay to the commissioner, by March 1 of each year, a tax at the rate of four-tenths of one percent on the first 20 million dollars, three-tenths of one percent on the next 20 million dollars, two-tenths of one percent on the next 20 million dollars, seventy-five thousandths of one percent on each dollar thereafter on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December 31 next preceding, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. Notwithstanding the foregoing, no tax shall be due or payable as to considerations received for annuity contracts.

(b) Each captive insurance company shall pay to the commissioner by March 1 of each year a tax at the rate of two hundred and twenty-five thousandths of one percent on the first 20 million dollars of assumed reinsurance premium, one hundred fifty thousandths of one percent on the next 20 million dollars, fifty thousandths of one percent on the next 20 million dollars, twenty-five thousandths of one percent of each dollar thereafter. However, no reinsurance tax applies to premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection (a). No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if the transaction is part of a plan to discontinue the operations of the other insurer, and if the intent of the parties to the transaction is to renew or maintain business with the captive insurance company.

(c) If the aggregate taxes to be paid by a captive insurance company calculated under subsections (a) and (b) amount to less than five thousand dollars ($5,000) in any year, the captive insurance company shall pay a tax of five thousand dollars ($5,000) for that year. The aggregate taxes paid by a captive insurance company may not exceed one hundred thousand dollars ($100,000) in any year.

(d) The minimum tax for a protected cell captive insurance company may not be less than five thousand dollars ($5,000) and shall apply to the protected cell captive insurance company as a whole and not to each protected cell. The maximum tax to be paid by a protected cell captive insurance company shall be the aggregate of the tax liabilities of each protected cell. The maximum tax liability attributed to any one protected cell captive insurance company shall be one hundred thousand dollars ($100,000).

(e) Examination expenses paid in accordance with Section 27-31B-10 and business privilege taxes paid in accordance with Section 40-14A-22 by a captive insurance company shall be allowed as credits to the tax provided for in this section for the calendar year in which they were paid. In the event application of the credit results in a negative tax due, the tax due shall be zero and any unused portion of the credit may not be carried forward for use in subsequent years.

(f) A captive insurance company failing to make returns as required by Chapter 14A of Title 40 or failing to pay within the time required all taxes assessed by this section, shall be subject to Section 27-4A-4.

(g) Two or more captive insurance companies under common ownership and control shall be taxed as though they were a single captive insurance company.

(h) For the purposes of this section, “common ownership and control” shall have the following meaning, as applicable:

(1) In the case of stock corporations, the direct or indirect ownership of 80 percent or more of the outstanding voting stock of two or more corporations by the same shareholder or shareholders.

(2) In the case of mutual corporations, the direct or indirect ownership of 80 percent or more of the surplus and the voting power of two or more corporations by the same member or members.

(i) In the case of a branch captive insurance company, the tax provided for in this section shall apply only to the branch business of the company.

(j) If a captive insurance company has been licensed for less than a full calendar year and has written premiums the tax for which is less than the minimum set forth in this section, the tax due shall be prorated as follows:

(1) If licensed on or before March 31, 100 percent.

(2) If licensed April 1 to June 30, 75 percent.

(3) If licensed July 1 to September 30, 50 percent.

(4) If licensed October 1 to December 31, 25 percent.

(k) If a captive insurance company surrenders its license and the calculated tax on premiums written during the calendar year is less than the minimum set forth in this section, the tax due shall be prorated as follows:

(1) If surrendered on or before March 31, 25 percent.

(2) If surrendered April 1 to June 30, 50 percent.

(3) If surrendered July 1 to September 30, 75 percent.

(4) If surrendered October 1 to December 31, 100 percent.

(l) The tax provided for in this section shall constitute all taxes collectible under the laws of this state from any captive insurance company, and no other occupation tax or other taxes shall be levied or collected from any captive insurance company by the state or any county, city, or municipality within this state, except business privilege taxes and ad valorem taxes on real and personal property used in the production of income.

(m) The tax provided for in this section shall not be applicable if the captive insurance company writes no premiums during the calendar year.
Ala. Code § 27-14-23 — Alabama Code / Title 27 / Chapter 14 / Section 27-14-23
Section 27-14-23 Effect of War on Contracts of Foreign Insurer
Status: in_force

No insurance contract issued to a citizen of this state by an insurer organized under the laws of a foreign country shall be invalidated by the occurrence of hostilities between such foreign country and the United States of America.
Ala. Code § 27-3-14 — Alabama Code / Title 27 / Chapter 3 / Section 27-3-14
Section 27-3-14 Deposit Requirements - Alien Insurers - Generally
Status: in_force

(a) An alien insurer shall not have authority to transact insurance in this state unless it has and maintains within the United States as deposits with trustees, public depositaries or in trust institutions approved by the commissioner under Section 27-3-15 assets available for discharge of its United States insurance obligations, which assets shall be in amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with the greater of the following sums:

(1) The largest deposit required by Section 27-3-11 to be made by foreign insurers transacting like kinds of insurance; or

(2) $300,000.00.

(b) Of the amount deposited by an alien insurer, an amount not less than that required under subdivisions (a)(1) or (a)(2) of this section shall be deposited and maintained on deposit in cash or securities eligible for deposit under Section 27-6-3 with the Treasurer of this state or with or through the public official having supervision of insurance in another state and shall be held in trust exclusively for the benefit and protection of the insurer’s policyholders or policyholders and creditors in the United States.

(c) The amount so held on deposit under subdivisions (a)(1) or (a)(2) of this section shall, for the purposes of this title, be deemed to be the paid-in capital, if a stock insurer, or minimum surplus, if a mutual insurer, of the insurer required to be maintained.

(d) If the insurer transacts surety insurance in this state, it shall make and maintain in this state the special deposit required under Section 27-3-12.

(e) Any such deposit made in this state shall be subject to the applicable provisions of Chapter 6 of this title; except, that if this state is the state of entry into the United States of the alien insurer the deposit shall be subject to the provisions of Chapter 33 of this title.
Ala. Code § 27-44-10 — Alabama Code / Title 27 / Chapter 44 / Section 27-44-10
Section 27-44-10 Submission of Plan of Operation and Amendments; Promulgation of Rules in Absence of Plan
Status: in_force

(a)(1) The association shall submit to the commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments thereto shall become effective upon approval in writing by the commissioner.

(2) If the association fails to submit a suitable plan of operation within 180 days following January 1, 1983, or if at any time thereafter the association fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this chapter. Such rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the association and approved by the commissioner.

(b) All member insurers shall comply with the plan of operation.

(c) The plan of operation shall, in addition to requirements enumerated elsewhere in this chapter:

(1) Establish procedures for handling the assets of the association.

(2) Establish the amount and method of reimbursing members of the board of directors under Section 27-44-7.

(3) Establish regular places and times for meetings of the board of directors.

(4) Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors.

(5) Establish the procedures whereby selections for the board of directors will be made and submitted to the commissioner.

(6) Establish any additional procedures for assessments under Section 27-44-9.

(7) Contain additional provisions necessary or proper for the execution of the powers and duties of the association.

(d) The plan of operation may provide that any or all powers and duties of the association, except those under Sections 27-44-8 (10) c and 27-44-9, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this association, or its equivalent, in two or more states. Such a corporation, association, or organization shall be reimbursed for any payments made on behalf of the association and shall be paid for its performance of any functions of the association. A delegation under this subsection shall take effect only with the approval of both the board of directors and the commissioner, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter.
Ala. Code § 27-21B-9 — Alabama Code / Title 27 / Chapter 21B / Section 27-21B-9
Section 27-21B-9 Garnishment of Wages
Status: in_force

(a) The Alabama Medicaid Agency may garnish the wages, salary, or other employment income of any person who is required by a court or administrative order to provide coverage of the costs of health services to a child who is eligible for medical assistance and has received payment from a third party for the cost of services for the child but has not used the payments to reimburse the other parent or guardian of the child, the provider of services, or the Alabama Medicaid Agency for its payments made. Current or past due child support shall have priority over claims for the costs of the services.

(b) In addition to the powers granted in subsection (a), the Alabama Medicaid Agency may notify the State Department of Revenue of any amounts due under this section. Upon proper and timely notice, the department shall withhold any amount from any state tax refund due to the above-described person.
Ala. Code § 27-19A-3 — Alabama Code / Title 27 / Chapter 19A / Section 27-19A-3
Section 27-19A-3 Prohibited Provisions
Status: in_force

No health insurance policy or employee benefit plan which is delivered, renewed, issued for delivery, or otherwise contracted for in this state shall:

(1) Prevent any person who is a party to or beneficiary of any such health insurance policy or employee benefit plan from selecting the dentist of his choice to furnish the dental care services offered by said policy or plan or interfere with said selection provided the dentist is licensed to furnish such dental care services in this state;

(2) Deny any dentist the right to participate as a contracting provider for such policy or plan provided the dentist is licensed to furnish the dental care services offered by said policy or plan;

(3) Authorize any person to regulate, interfere, or intervene in any manner in the diagnosis or treatment rendered by a dentist to his patient for the purpose of preventing, alleviating, curing, or healing dental illness or injury provided said dentist practices within the scope of his license; or

(4) Require that any dentist furnishing dental care services must make or obtain dental X rays or any other diagnostic aids for the purpose of preventing, alleviating, curing, or healing dental illness or injury; provided, however, that nothing herein shall prohibit requests for existing dental X rays or any other existing diagnostic aids for the purpose of determining benefits payable under a health insurance policy or employee benefit plan.

Nothing herein shall prohibit the predetermination of benefits for dental care expenses prior to treatment by the attending dentist.
Ala. Code § 27-10-1 — Alabama Code / Title 27 / Chapter 10 / Section 27-10-1
Section 27-10-1 Representing or Aiding Unauthorized Insurer Not Allowed; Exceptions; Enforcement of Contracts
Status: in_force

(a) In this state, no person shall act as agent for, or otherwise represent, directly or indirectly, any insurer not authorized to transact insurance in this state in the solicitation, negotiation, or effectuation of insurance or annuity contracts, forwarding of applications, delivery of policies or contracts, inspection of risks, fixing of rates, investigation or adjustment of losses, collection of premiums, or in any other manner in the transaction of insurance with respect to subjects of insurance located or performed in this state.

(b) This section shall not apply to:

(1) Acceptance of service of process by the commissioner under Section 27-10-52;

(2) Surplus lines insurance or coverage specified in Section 27-10-34;

(3) Adjustment of losses as authorized in Section 27-10-35;

(4) Transactions for which a certificate of authority to do business is not required of an insurer under the laws of this state;

(5) Reinsurance effectuated in accordance with this title; or

(6) The property and operations of the shipbuilding or ship repair industry engaged in interstate or foreign commerce and vessels, cargoes, watercraft, piers, wharves, graven docks, dry docks, marine railways, and building ways, commonly known as wet marine.

(c) No insurance contract entered into in violation of this section shall preclude the insured from enforcing his or her rights under the contract in accordance with the terms and provisions of the contract and the laws of this state to the same degree those rights would have been enforceable had the contract been lawfully procured.
Ala. Code § 27-19-21 — Alabama Code / Title 27 / Chapter 19 / Section 27-19-21
Section 27-19-21 Optional Policy Provisions - Insurance with Other Insurers - Other Benefits
Status: in_force

(a) There may be a provision as follows:

“Insurance with Other Insurers: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense-incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined.”

(b) If the foregoing policy provision is included in a policy which also contains the policy provision set out in Section 27-19-20, there shall be added to the caption of the foregoing provision the phrase ”- Other Benefits.” The insurer may, at its option, include in this provision a definition of “other valid coverage,” approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this, or any other, state of the United States or any province of Canada and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of such definition, such term shall not include group insurance or benefits provided by union welfare plans, or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute, including any workmen’s compensation or employer’s liability statute, whether provided by a governmental agency or otherwise, shall, in all cases, be deemed to be “other valid coverage” of which the insurer has had notice. In applying the foregoing policy provision, no third party liability coverage shall be included as “other valid coverage.”
Ala. Code § 27-45-9 — Alabama Code / Title 27 / Chapter 45 / Section 27-45-9
Section 27-45-9 Violations
Status: in_force

Each willful violation of the provisions of this article shall be punishable as provided in Section 27-1-12.
Ala. Code § 27-19-103 — Alabama Code / Title 27 / Chapter 19 / Section 27-19-103
Section 27-19-103 Definitions
Status: in_force

Unless the context requires otherwise, the definitions in this section apply throughout this article.

(1) APPLICANT. In the case of:

a. An individual long-term care insurance policy, the person who seeks to contract for benefits.

b. A group long-term care insurance policy, the proposed certificate holder.

(2) CERTIFICATE. Any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this state.

(3) COMMISSIONER. The Alabama Commissioner of Insurance.

(4) GROUP LONG-TERM CARE INSURANCE. A long-term care insurance policy which is delivered or issued for delivery in this state and issued to any of the following:

a. One or more employers or labor organizations, or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof, or for members or former members or a combination thereof, of the labor organizations.

b. Any professional, trade, or occupational association for its members or former or retired members, or combination thereof, if the association meets both of the following requirements:

1. Is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation.

2. Has been maintained in good faith for purposes other than obtaining insurance.

c. An association or a trust or the trustee or trustees of a fund established, created, or maintained for the benefit of members of one or more associations. Prior to advertising, marketing, or offering the policy within this state, the association or associations, or the insurer of the association or associations, shall file evidence with the commissioner that the association or associations have at the outset a minimum of 100 persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance; have been in active existence for at least one year; and have a constitution and bylaws which provide all of the following:

1. The association or associations hold regular meetings, not less than annually, to further purposes of the members.

2. Except for credit unions, the association or associations collect dues or solicit contributions from members.

3. The members have voting privileges and representation on the governing board and committees. Thirty days after this filing, the association or associations shall be deemed to satisfy these organizational requirements, unless the commissioner makes a finding that the association or associations do not satisfy those organizational requirements.

d. A group, other than as described in paragraphs a., b., and c., subject to a finding by the commissioner that:

1. The issuance of the group policy is not contrary to the best interest of the public.

2. The issuance of the group policy would result in economies of acquisition or administration.

3. The benefits are reasonable in relation to the premiums charged.

(5) LONG-TERM CARE INSURANCE. Any insurance policy or rider advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital. This term includes group and individual annuities and life insurance policies or riders that provide directly or that supplement long-term care insurance. This term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term shall also include qualified long-term care insurance contracts. Long-term care insurance may be issued by insurers as follows: Fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations; or any similar organization to the extent they are otherwise authorized to issue life or health insurance. Long-term care insurance shall not include any insurance policy which is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset-protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. With regard to life insurance, this term does not include life insurance policies which accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention, or permanent institutional confinement, and which provide the option of a lump-sum payment for those benefits and in which neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding any other provision contained herein, any product advertised, marketed, or offered as long-term care insurance shall be subject to the provisions of this article. The definition of long-term care insurance under this article is designed to allow maximum flexibility in benefit scope, intensity, and level, while assuring that the purchasers’ reasonable expectations for a long-term care insurance policy are met. The article is intended to permit long-term care insurance policies to cover either diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, or any combination thereof, and not to mandate coverage for each of these types of services. Pursuant to the definition, long-term care insurance may be either a group or individual insurance policy or a rider to a policy, for example, life or disability. The language in the definition concerning “other than an acute care unit of a hospital” is intended to allow payment of benefits when a portion of a hospital has been designated for, and duly licensed or certified as, a long-term care provider or swing bed.

(6) POLICY. Any policy, contract, subscriber agreement, rider, or endorsement delivered or issued for delivery in this state by an insurer, fraternal benefit society, nonprofit health, hospital, or medical service corporation, prepaid health plan, health maintenance organization, or any similar organization.

(7)a. QUALIFIED LONG-TERM CARE INSURANCE CONTRACT or FEDERALLY TAX-QUALIFIED LONG-TERM CARE INSURANCE CONTRACT. An individual or group insurance contract that meets the requirements of Section 7702B (b) of the Internal Revenue Code of 1986, as amended, as follows:

1. The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.

2. The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, as amended, or would be so reimbursable but for the application of a deduction or coinsurance amount. The requirements of this subparagraph do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payor. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.

3. The contract is guaranteed renewable, within the meaning of Section 7702B (b)(1)(C) of the Internal Revenue Code of 1986, as amended.

4. The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed, except as provided in subparagraph 5.

5. All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract.

6. The contract meets the consumer protection provisions set forth in Section 7702B (g) of the Internal Revenue Code of 1986, as amended.

b. QUALIFIED LONG-TERM CARE INSURANCE CONTRACT or FEDERALLY TAX-QUALIFIED LONG-TERM CARE INSURANCE CONTRACT. This term also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Sections 7702B (b) and (e) of the Internal Revenue Code of 1986, as amended.
Ala. Code § 27-19-36 — Alabama Code / Title 27 / Chapter 19 / Section 27-19-36
Section 27-19-36 Age Limit or Date for Termination of Coverage
Status: in_force

If any such policy contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective and if such date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy will continue in force subject to any right of cancellation until the end of the period for which premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective or would have ceased prior to the acceptance of such premium, or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy.
Ala. Code § 27-31D-2 — Alabama Code / Title 27 / Chapter 31D / Section 27-31D-2
Section 27-31D-2 Premium Discount or Insurance Rate Reduction - Fortified Existing Homes
Status: in_force

(a) Commencing on May 14, 2009, insurance companies shall provide a premium discount or insurance rate reduction in an amount and manner as established in subsection (g) and pursuant to Section 27-31D-3. In addition, insurance companies may also offer additional adjustments in deductible, other credit rate differentials, or a combination thereof, collectively referred to as adjustments. These adjustments shall be available under the terms specified in this section to any owner who retrofits his or her insurable property located in the State of Alabama to resist loss due to hurricane or other catastrophic windstorm events.

(b) To obtain the adjustment provided in this section, an insurable property shall be retrofitted to any of the following:

(1) The Fortified Home: Hurricane Standards (FHH), or the Fortified Home: Highwind and Hail Standards (FHWH) requirements as may from time to time be adopted by the Institute for Business and Home Safety (IBHS), or a successor entity.

(2) Another mitigation program, or other construction technique, or other standardized code which may be submitted by each insurer and approved by the commissioner.

(3) Zone three HUD code manufactured homes shall also be retrofitted as defined in the Fortified Home-Hurricane: Manufactured/Modular Home Guidelines (FHHM) requirements as may from time to time be adopted by the IBHS.

(c) An insurable property shall be certified as conforming to Fortified Commercial Standard or Fortified Home requirements only after inspection and certification by an IBHS certified inspector.

(d) Certification of conformity of an insurable property with the other mitigation program, other construction technique, or other standardized code shall be made only by a certified or licensed building inspector.

(e) An owner of insurable property claiming an adjustment pursuant to subsection (d) and subdivision (2) of subsection (b) shall maintain certification records and construction records including a certification of compliance with the mitigation program, construction technique, or standardized building code, as applicable, as provided in subdivision (2) of subsection (b), receipts from contractors, receipts for materials, and records from local building officials. The records shall be subject to audit by the commissioner, or his or her representatives, and copies of the records shall be presented to the insurer or potential insurer of a property owner before the adjustment becomes effective for the insurable property.

(f) An owner of insurable property claiming an adjustment pursuant to subsection (c) and subdivision (1) or (3) of subsection (b) shall maintain the IBHS certification documentation, which shall be considered proof of compliance with the FCS or Fortified Home requirements described in subsection (c) and subdivision (1) or (3) of subsection (b). The certification shall be presented to the insurer or potential insurer of a property owner before the adjustment becomes effective for the insurable property.

(g) Insurers required to submit rates and rating plans to the commissioner shall submit actuarially justified rating plans for any person who retrofits an insurable property to comply with the sets of alternatives provided in subsection (b). The adjustment shall only apply to policies that provide wind coverage and may apply to that portion of the premium for wind coverage or to the total premium if the insurer does not separate out its premium for wind coverage in its rate filing. The adjustment shall apply exclusively to the premium designated for the improved insurable property. In addition to the requirements of this section, an insurer may voluntarily offer any other mitigation adjustment that the insurer deems appropriate.
Ala. Code § 27-2A-4 — Alabama Code / Title 27 / Chapter 2A / Section 27-2A-4
Section 27-2A-4 Nonrenewals, Cancellations, or Revisions of Ceded Reinsurance Agreements
Status: in_force

(a) Materiality and scope.

(1) No nonrenewals, cancellations, or revisions of ceded reinsurance agreements need be reported pursuant to Section 27-2A-2 if the nonrenewals, cancellations, or revisions are not material. For purposes of this section, a material nonrenewal, cancellation, or revision is one that affects:

a. As respects property and casualty business, including accident and health business written by a property and casualty insurer:

1. More than 50 percent of the insurer’s total ceded written premium.

2. More than 50 percent of the insurer’s total ceded indemnity and loss adjustment reserves.

b. As respects life, annuity, and accident and health business: More than 50 percent of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer’s most recent annual statement.

c. As respects either property and casualty or life, annuity, and accident and health business, either of the following events shall constitute a material revision which shall be reported:

1. An authorized reinsurer representing more than 10 percent of a total cession is replaced by one or more unauthorized reinsurers.

2. Previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than 10 percent of a total cession.

(2) However, no filing shall be required if:

a. As respects property and casualty business, including accident and health business written by a property and casualty insurer: The insurer’s total ceded written premium represents, on an annualized basis, less than 10 percent of its total written premium for direct and assumed business.

b. As respects life, annuity, and accident and health business: The total reserve credit taken for business ceded represents, on an annualized basis, less than 10 percent of the statutory reserve requirement prior to any cession.

(b) Information to be reported.

(1) The following information is required to be disclosed in any report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements:

a. Effective date of the nonrenewal, cancellation, or revision.

b. The description of the transaction with an identification of the initiator thereof.

c. Purpose of, or reason for, the transaction.

d. If applicable, the identity of the replacement reinsurers.

(2) Insurers are required to report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis, unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars ($1,000,000) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer’s capital and surplus.
Ala. Code § 27-18-11 — Alabama Code / Title 27 / Chapter 18 / Section 27-18-11
Section 27-18-11 Policy Provisions - Conversion - Termination of Eligibility
Status: in_force

The group life insurance policy shall contain a provision that if the insurance, or any portion of it, on a person covered under the policy ceases because of termination of employment or of membership in the class, or classes, eligible for coverage under the policy, such person shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, provided application for the individual policy shall be made and the first premium paid to the insurer within 31 days after such termination and provided, further, that:

(1) The individual policy shall, at the option of such person, be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for;

(2) The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination less the amount of any life insurance for which such person is, or becomes, eligible under any other group policy within 31 days after such termination, provided that any amount of insurance which shall have matured on, or before, the date of such termination as an endowment payable to the person insured, whether in one sum, or in installments or in the form of an annuity shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination; and

(3) The premium on the individual policy shall be at the insurer’s then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs and to his age attained on the effective date of the individual policy.
Ala. Code § 27-2-31 — Alabama Code / Title 27 / Chapter 2 / Section 27-2-31
Section 27-2-31 Hearings - Order
Status: in_force

(a) In the conduct of hearings under this title and making his order thereon, the commissioner shall act in a quasi-judicial capacity.

(b) Within 30 days after termination of the hearing, or of any rehearing thereof or reargument thereon, or within such other period as may be specified in this title as to particular proceedings, the commissioner shall make his order on hearing, covering matters involved in such hearing and in any such rehearing or reargument, and shall give a copy of such order to the same persons given notice of the hearing and to all parties to the hearing.

(c) The order shall contain a concise statement of the facts as found by the commissioner, his conclusions therefrom, and the matters required by Section 27-2-18.

(d) The order may affirm, modify, or rescind action theretofore taken or may constitute the taking of new action within the scope of the notice of hearing.

(e) This section does not apply as to hearings provided for in Chapter 13 of this title.
Ala. Code § 27-29-3 — Alabama Code / Title 27 / Chapter 29 / Section 27-29-3
Section 27-29-3 Acquisition of Control Of, or Merger With, Domestic Insurers
Status: in_force

(a)(1) No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire in the open market any voting security of a domestic insurer if, after the consummation thereof, such person would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of such insurer, and no person shall enter into an agreement to merge with or otherwise to acquire control of a domestic insurer, or any person controlling a domestic insurer unless, at the time any such offer, request, or invitation is made or any such agreement is entered into, or prior to the acquisition of such securities if no offer or agreement is involved, such person has filed with the commissioner and has sent to such insurer a statement containing the information required by this section and such offer, request, invitation, agreement, or acquisition has been approved by the commissioner in the manner prescribed in this section.

(2) For purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least 30 days prior to the cessation of control. The commissioner shall determine those instances in which the party or parties seeking to divest or to acquire a controlling interest in an insurer, will be required to file for and obtain approval of the transaction. The information shall remain confidential until the conclusion of the transaction unless the commissioner, in his or her discretion, determines that confidential treatment will interfere with enforcement of this section. If the statement referred to in subdivision (1) is otherwise filed, this subdivision shall not apply.

(3) With respect to a transaction subject to this section, the acquiring person must also file a pre-acquisition notification with the commissioner, which shall contain the information set forth in subdivision (c)(1) of Section 27-29-3.1. A failure to file the notification may be subject to penalty specified in subdivision of (e)(3) of Section 27-29-3.1.

(4) For purposes of this section:

a. A domestic insurer includes any person controlling a domestic insurer unless the person, as determined by the commissioner, is either directly or through its affiliates primarily engaged in business other than the business of insurance.

b. Person does not include any securities broker holding, in the usual and customary broker’s function, less than 20 percent of the voting securities of an insurance company or of any person that controls an insurance company.

(b)(1) The statement to be filed with the commissioner under this section shall be made under oath or affirmation and shall contain all of the following information:

a. The name and address of each person by whom, or on whose behalf, the merger or other acquisition of control referred to in subsection (a) is to be effected (hereinafter called “acquiring party”), and either of the following:

1. If the person is an individual, his or her principal occupation and all offices and positions held during the past five years, and any conviction of crimes other than minor traffic violations during the past 10 years.

2. If the person is not an individual, a report of the nature of its business operations during the past five years or for the lesser period as such person and any predecessors thereof shall have been in existence; an informative description of the business intended to be done by the person and the person’s subsidiaries; and a list of all individuals who are, or who have been selected to become, directors or executive officers of the person or who perform, or will perform, functions appropriate to the positions. The list shall include for each individual the information required by subparagraph 1.

b. The source, nature, and amount of the consideration used, or to be used, in effecting the merger or other acquisition of control, a description of any transaction wherein funds were, or are to be, obtained for any such purpose, including any pledge of the insurer’s stock, or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing such consideration; provided, however, that where a source of such consideration is a loan made in the lender’s ordinary course of business, the identity of the lender shall remain confidential if the person filing such statement so requests.

c. Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years of each such acquiring party, or for such lesser period as such acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement.

d. Any plans or proposals which each acquiring party may have to liquidate such insurer, to sell its assets, or to merge or consolidate it with any person or to make any other material change in its business or corporate structure or management.

e. The number of shares of any security referred to in subsection (a) which each acquiring party proposes to acquire, the terms of the offer, request, invitation, agreement, or acquisition referred to in subsection (a), and a statement as to the method by which the fairness of the proposal was arrived at.

f. The amount of each class of any security referred to in subsection (a) which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party.

g. A full description of any contracts, arrangements, or understandings with respect to any security referred to in subsection (a) in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. Such description shall identify the persons with whom such contracts, arrangements, or understandings have been entered.

h. A description of the purchase of any security referred to in subsection (a) during the 12 calendar months preceding the filing of the statement by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid, or agreed to be paid, therefor.

i. A description of any recommendations to purchase any security referred to in subsection (a) made during the 12 calendar months preceding the filing of the statement by any acquiring party or by anyone based upon interviews or at the suggestion of such acquiring party.

j. Copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities referred to in subsection (a) and, if distributed, of additional soliciting material relating thereto.

k. The terms of any agreement, contract, or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (a) for tender and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto.

l. An agreement by the person required to file the statement referred to in subsection (a) that it will provide the annual report, specified in subdivision (1) of subsection (l) of Section 27-29-4, for so long as control exists.

m. An acknowledgement by the person required to file the statement referred to in subsection (a) that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer.

n. Such additional information as the commissioner may, by rule or regulation, prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest.

(2) If the person required to file the statement referred to in subsection (a) is a partnership, limited partnership, syndicate, or other group, the commissioner may require that the information called for by paragraphs a. through n. of subdivision (1) shall be given with respect to each partner of such partnership or limited partnership, each member of such syndicate or group, and each person who controls such partner or member. If any such partner, member, or person is a corporation or the person required to file the statement referred to in subsection (a) is a corporation, the commissioner may require that the information called for by paragraphs a. through n. of subdivision (1) shall be given with respect to such corporation, each officer and director of such corporation, and each person who is, directly or indirectly, the beneficial owner of more than 10 percent of the outstanding voting securities of such corporation. If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to such insurer pursuant to this section, an amendment setting forth such change, together with copies of all documents and other materials relevant to such change, shall be filed with the commissioner and sent to such insurer within two business days after the person learns of such change.

(c) If any offer, request, invitation, agreement, or acquisition referred to in subsection (a) is proposed to be made by means of a registration statement under the Securities Act of 1933, or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (a) may utilize such documents in furnishing the information called for by that statement.

(d)(1) The commissioner shall approve any merger or other acquisition of control referred to in subsection (a) unless, after a public hearing thereon, he or she finds any of the following:

a. After the change of control, the domestic insurer referred to in subsection (a) would not be able to satisfy the requirements for the issuance of a license to write the line, or lines, of insurance for which it is presently licensed.

b. The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or to create a monopoly therein. In applying the competitive standard in this paragraph:

1. The informational requirements of subdivision (c)(1) of Section 27-29-3.1 and the standards of subdivision (d)(2) of Section 27-29-3.1 shall apply.

2. The merger or other acquisition shall not be disapproved if the commissioner finds that any of the situations meeting the criteria provided by subdivision (d)(3) of Section 27-29-3.1 exist.

3. The commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time.

c. The financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders.

d. The plans or proposals which the acquiring party has to liquidate the insurer, to sell its assets, or to consolidate or merge it with any person or to make any other material change in its business or corporate structure or management are unfair and unreasonable to policyholders of the insurer and not in the public interest.

e. The competence, experience, and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control.

f. The acquisition is likely to be hazardous or prejudicial to the insurance-buying public.

(2) The public hearing referred to in subdivision (1) shall be held within 30 days after the statement required by subsection (a) is filed, and at least 20 days’ notice thereof shall be given by the commissioner to the person filing the statement. Not less than seven days’ notice of such public hearing shall be given by the person filing the statement to the insurer and to such other persons as may be designated by the commissioner. The commissioner shall make a determination within the 60-day period preceding the effective date of the proposed transaction. At such hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent, and any other person whose interest may be affected thereby shall have the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and, in connection therewith, shall be entitled to conduct discovery proceedings in the same manner as is presently allowed in the circuit courts of this state. All discovery proceedings shall be concluded not later than three days prior to the commencement of the public hearing.

(3) If the proposed acquisition of control will require the approval of more than one commissioner, the public hearing referred to in subdivision (2) may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a). The person shall file the statement referred to in subsection (a) with the NAIC within five days of making the request for a public hearing. A commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt-out within 10 days of the receipt of the statement referred to in subsection (a). A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the insurers are domiciled. The commissioners shall hear and receive evidence. A commissioner may attend the hearing in person or by telecommunication.

(4) In connection with a change of control of a domestic insurer, any determination by the commissioner that the person acquiring control of the insurer shall be required to maintain or restore the capital of the insurer to the level required by the laws and regulations of this state shall be made not later than 60 days after the date of notification of the change in control submitted pursuant to subdivision (a)(1).

(5) The commissioner may retain any attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner’s staff as may be reasonably necessary to assist the commissioner in reviewing the proposed acquisition of control, the reasonable expenses of which shall be borne by the acquiring person.

(e) The provisions of this section shall not apply to:

(1) Any transaction which is subject to the provisions of Sections 27-27-45 and 27-27-46, dealing with the merger or consolidation of two or more insurers.

(2) Any offer, request, invitation, agreement, or acquisition which the commissioner by order shall exempt therefrom as either of the following:

a. Not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer.

b. As otherwise not comprehended within the purposes of this section.

(f) The following shall be violations of this section:

(1) The failure to file any statement, amendment, or other material required to be filed pursuant to subsections (a) or (b).

(2) The effectuation, or any attempt to effectuate, an acquisition of control of, or merger with, a domestic insurer unless the commissioner has given his or her approval thereto.

(g) The courts of this state are hereby vested with jurisdiction over every person not resident, domiciled, or authorized to do business in this state who files a statement with the commissioner under this section and over all actions involving such person arising out of violations of this section, and each such person shall be deemed to have performed acts equivalent to and constituting an appointment by such a person of the commissioner to be his or her true and lawful attorney upon whom may be served all lawful process in any action or proceeding arising out of violations of this section. Copies of all such lawful process shall be served on the commissioner and transmitted by registered or certified mail by the commissioner to such person at his or her last known address.
Ala. Code § 27-27-1 — Alabama Code / Title 27 / Chapter 27 / Section 27-27-1
Section 27-27-1 Definitions
Status: in_force

For the purposes of this chapter, the following terms shall have the meanings respectively ascribed to them by this section:

(1) STOCK INSURER. An incorporated insurer with capital divided into shares and owned by its stockholders.

(2) DOMESTIC MUTUAL INSURER. An incorporated insurer without capital stock and the governing body of which is elected as provided in this chapter.
Ala. Code § 27-31C-6 — Alabama Code / Title 27 / Chapter 31C / Section 27-31C-6
Section 27-31C-6 Exemptions from Chapter
Status: in_force

The commissioner, by rule, regulation, or order, may exempt an Alabama Coastal Captive Insurance Company, on a case-by-case basis, from provisions of this chapter that are determined to be inappropriate given the nature of the risks to be insured and the intent of this chapter.
Ala. Code § 27-28-2 — Alabama Code / Title 27 / Chapter 28 / Section 27-28-2
Section 27-28-2 Plan for Exchange of Stock, Etc., Between Domestic Stock Insurer and Holding Company - Procedure for Exchange
Status: in_force

A plan of exchange shall be adopted and become effective in the following manner:

(1) APPROVAL OF THE BOARDS OF DIRECTORS. - The boards of directors of each corporate party to the plan of exchange by resolution shall adopt the plan of exchange which shall set forth the terms and conditions of the exchange and the mode of carrying the same into effect and such other provisions with respect to the exchange as may be deemed necessary or desirable.

(2) APPROVAL OF COMMISSIONER. - Every plan of exchange, before being submitted to vote of the stockholders pursuant to subdivision (3) of this section, shall be submitted for approval to the commissioner in accordance with the following procedure:

a. After the approval required by subdivision (1) of this section is obtained, the domestic company shall submit to the commissioner three copies of the plan of exchange and any other information which the commissioner may require with respect to such plan;

b. Upon the submission of the plan, the commissioner shall schedule a public hearing to determine if the terms and conditions of the plan of exchange are fair, to be held within 30 days after such submission. Each corporation which is a party to the plan shall give notice of the time and place of such hearing to each stockholder of record of the corporation, as of a date 15 days prior to the date of the hearing, by letter mailed not later than 10 days prior to the hearing. Each corporation which is a party to the plan shall further cause notice of the hearing to be published in a newspaper of general circulation in the city wherein is located the principal place of business of the corporation, once a week for two consecutive weeks, the last publication of such notice to be not more than two weeks prior to the hearing date. Each stockholder of any corporation which is a party to the plan and each policyholder of the domestic company or any other domestic insurance company which is a party to the plan shall be entitled to appear and be heard in said hearing and said notices shall so state; and

c. After conclusion of the hearing and not later than 60 days after submission of the plan, the commissioner shall issue a written order approving the terms and conditions of the plan of exchange as delivered to him and such modifications therein as the board of directors of each corporation which is a party to the plan shall approve, only if he finds: 1. That the terms and conditions of the plan, including modifications, if any, if effected, will not tend adversely to affect the financial stability or management of the domestic company or any other domestic insurance company which is a party to the plan; 2. That the interests of the policyholders of the domestic company and any other domestic insurance company which is a party to the plan are protected; and 3. That the terms and conditions of the plan and the proposed issuance and exchange are fair to all stockholders to whom it is proposed to issue stock or other securities of the holding company by the terms of the plan.

If the commissioner fails to approve the plan, he shall state his reasons therefor in writing. Any party in interest may appeal from the ruling of the commissioner to the circuit court in the circuit where the insurance company maintains its home office by giving notice of such appeal to the commissioner within two weeks after such ruling. All expenses of the commissioner relating to the hearing shall be paid by the domestic company.

(3) APPROVAL OF STOCKHOLDERS. - The plan of exchange as approved by the commissioner pursuant to the provisions of subdivision (2) of this section shall then be submitted to a vote of the stockholders of the domestic company at an annual or special meeting of the stockholders. Written or printed notice shall be given to each stockholder of record entitled to vote at such meeting, not less than 20 days before such meeting, in the manner provided in the Alabama Business Corporation Act for the giving of notice of meetings of stockholders, and shall state the purpose of the meeting, whether the meeting be an annual or a special meeting. A copy or a summary of the plan of exchange shall be included in or enclosed with such notice. At such meeting, a vote of the stockholders shall be taken on the proposed plan of exchange. Each outstanding share of the domestic company shall be entitled to vote on the proposed plan of exchange, whether or not such share has voting rights under the provisions of the certificate of incorporation of the domestic company. The plan shall be approved upon receiving the affirmative vote of the holders of at least two thirds of the outstanding shares of the domestic company, unless any class of shares of the domestic company is entitled to vote as a class therein, in which event, the plan of exchange shall be approved upon receiving the affirmative vote of the holders of at least two thirds of the outstanding shares for each class of shares entitled to vote as a class thereon and of the total outstanding shares. Any class of shares of the domestic company shall be entitled to vote as a class if the plan of exchange contains any provision which, if contained in a proposed amendment to the certificate of incorporation, would entitle such class of shares to vote as a class. After such approval of the plan of exchange, and at any time prior to the filing of the certificate setting forth the plan of exchange pursuant to this subdivision, the plan of exchange may be abandoned pursuant to a provision for such abandonment, if any, contained in the plan of exchange. Stockholder approval by the stockholders of any other corporate party to the plan of exchange shall be governed by the laws otherwise applicable to the transactions involved in the plan.

(4) RIGHTS OF DISSENTING STOCKHOLDERS. - If any stockholder of the domestic company shall file with such corporation prior to, or at the meeting of, stockholders at which the plan of exchange is submitted to a vote a written objection to such plan and shall not vote in favor thereof and such stockholder, within 10 days after the date on which the vote was taken, shall make written demand on the domestic company for payment of the fair value of his shares as of the day prior to the date on which the vote was taken approving the plan, then, if the plan is effected, the domestic company or surviving corporation, if a merger is included in the plan, shall pay to such stockholder, upon surrender of his certificate, or certificates, representing such shares, the fair value thereof. Such demand shall state the number and class of the shares owned by such dissenting stockholder. Any stockholder failing to make demand within the 10-day period shall be bound by the terms of the plan of exchange.

Within 10 days after the plan is effected, the domestic company or surviving corporation, as the case may be, shall give notice thereof to each dissenting stockholder who has made demand as provided for in this subdivision the payment of the fair value of his shares.

If within 30 days after the date on which such plan was effected the value of such shares is agreed upon between the dissenting stockholder and the domestic company or surviving corporation, payment therefor shall be made within 90 days after the date on which such plan was effected from the fund established pursuant to the provisions of subdivision (5) of this section or, if the fund is not sufficient for such payment, from other cash assets, upon the surrender of the dissenting stockholder’s certificate, or certificates, representing such shares. Upon payment of the agreed value, the dissenting stockholder shall cease to have any interest in such shares or in the corporation.

If within such period of 30 days the stockholder and the domestic company or the surviving corporation do not so agree, then the dissenting stockholder may, within 60 days after the expiration of the 30-day period, file a petition in any circuit court, asking for a finding and determination of the fair value of such shares, and shall be entitled to judgment against the domestic company or surviving corporation for the amount of such fair value as of the day prior to the date on which such vote was taken approving such plans, together with interest thereon to the date of such judgment. The judgment shall be payable only upon, and simultaneously with, the surrender to the domestic company or surviving corporation of the certificate or certificates representing such shares and shall be payable from the fund established pursuant to the provisions of subdivision (5) of this section or, if the fund is not sufficient for such payment, from other cash assets. Upon payment of the judgment, the dissenting stockholder shall cease to have any interest in such shares, or in the domestic company or surviving corporation. Unless the dissenting stockholder shall file such petition within the time limited in this subdivision, such stockholder and all persons claiming under him shall be bound by the terms of the plan of exchange.

Shares acquired by the domestic company or the surviving corporation pursuant to the payment of the agreed value thereof or of the judgment entered therefor, as in this subdivision provided, shall be treasury shares and may be held and disposed of by such corporation as in the case of other treasury shares.

A nominee of a corporate fiduciary holding shares of stock for more than one fiduciary account may dissent as to less than all of the shares registered in his name. In that event, his rights shall be determined as if the shares as to which he has dissented and his other shares were registered in the names of different stockholders.

The dissenting rights of stockholders of any other corporate party to the plan of exchange shall be governed by the laws otherwise applicable to the transactions involved in the plan.

(5) FILING PLAN OF EXCHANGE. - After the date of the meeting of stockholders of the domestic company at which the plan of exchange was submitted to such stockholders, a certificate setting forth:

a. The plan of exchange;

b. The vote by which such plan was adopted by the stockholders of the domestic company and any other corporate party to the plan whose stockholders approved the plan under the laws otherwise applicable;

c. The number of shares of the domestic company for which a dissenting right has been preserved and for which no payment has been made pursuant to subdivision (4) of this section; or

d. That the plan of exchange has been abandoned shall be executed on behalf of the domestic company by its president, or a vice-president, and attested by its secretary, or an assistant secretary, under the corporate seal, and shall then be presented in triplicate to the commissioner. If the certificate indicates that the plan of exchange has been approved by stockholders as required by subdivision (3) of this section and that the facts otherwise conform to the law, he shall require the domestic company, prior to the time the plan becomes effective, to create a fund in cash distinct from its other assets to provide for the payment for all shares with respect to which a dissenting right has been preserved and for which no payment has been made pursuant to subdivision (4) of this section. The amount of said fund shall not limit the amount to be paid to dissenting stockholders under the provisions of subdivision (4) of this section, nor shall the amount of the fund be used as evidence in any proceeding to establish the fair value of shares for which dissenting rights are asserted. Thereafter, upon the creation of such a fund, the commissioner shall endorse his approval on the certificate and the same shall then be filed in the Office of the Secretary of State. Upon such filing of such certificate, the plan of exchange shall become effective unless a later date and time is specified in the plan of exchange, in which event, the plan of exchange and issuance and exchange provided for therein shall become effective upon such later date and time.

(6) EFFECT OF EXCHANGE. - Upon the plan of exchange becoming effective, the exchange, or exchanges, provided for therein shall be deemed to have been consummated, each stockholder of the domestic company shall cease to be a stockholder of such company and the ownership of all shares of the issued and outstanding stock of the domestic company shall vest in the holding company automatically without any physical transfer or deposit of certificates representing such shares.

Certificates representing shares of the domestic company prior to the plan of exchange becoming effective shall after the plan of exchange becomes effective automatically represent shares of the issued and outstanding capital stock or other securities issued by the holding company, provided that the plan of exchange:

a. Shall specify that all certificates representing shares of stock of the domestic company may, after the plan of exchange becomes effective, be exchanged by any stockholder for shares of stock or other securities issued by the holding company; and

b. May require that all certificates representing shares of stock of the domestic company shall, after the plan of exchange becomes effective, represent only the right to receive shares of stock or other securities issued by the holding company as shall be specified in the plan of exchange.
Ala. Code § 27-29A-1 — Alabama Code / Title 27 / Chapter 29A / Section 27-29A-1
Section 27-29A-1 Purpose and Scope
Status: in_force

(a) The purpose of this chapter is to provide the requirements for maintaining a risk management framework and completing an Own Risk and Solvency Assessment (ORSA) and provide guidance and instructions for filing an ORSA Summary Report with the Commissioner of Insurance.

(b) The requirements of this chapter shall apply to all insurers domiciled in this state unless exempt pursuant to Section 27-29A-6.

(c) The Legislature finds and declares that the ORSA Summary Report will contain confidential and sensitive information related to an insurer or insurance group’s identification of risks material and relevant to the insurer or insurance group filing the report. This information will include proprietary and trade secret information that has the potential for harm and competitive disadvantage to the insurer or insurance group if the information is made public. It is the intent of this Legislature that the ORSA Summary Report shall be a confidential document filed with the commissioner, that the ORSA Summary Report will be shared only as stated herein and to assist the commissioner in the performance of his or her duties, and that in no event shall the ORSA Summary Report be subject to public disclosure.
Ala. Code § 27-19-26 — Alabama Code / Title 27 / Chapter 19 / Section 27-19-26
Section 27-19-26 Optional Policy Provisions - Intoxicants and Narcotics
Status: in_force

There may be a provision as follows:

“Intoxicants and Narcotics: The insurer shall not be liable for any loss sustained or contracted in consequence of the insured’s being intoxicated or under the influence of any narcotic unless administered on the advice of a physician.”
Ala. Code § 27-26-27 — Alabama Code / Title 27 / Chapter 26 / Section 27-26-27
Section 27-26-27 Stabilization Reserve Fund - Generally
Status: reserved

Repealed by Act 2015-70 effective April 21, 2015.
Ala. Code § 27-26-26 — Alabama Code / Title 27 / Chapter 26 / Section 27-26-26
Section 27-26-26 When Underwriting Operations Commenced
Status: reserved

Repealed by Act 2015-70 effective April 21, 2015.
Ala. Code § 27-29-4 — Alabama Code / Title 27 / Chapter 29 / Section 27-29-4
Section 27-29-4 Registration of Insurers
Status: in_force

(a)(1) Every insurer which is authorized to do business in this state and which is a member of an insurance holding company system shall register with the commissioner, except a foreign insurer subject to registration requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in this section and both of the following:

a. Subdivision (a)(1), and subsections (b) and (d) of Section 27-29-5.

b. Either subdivision (a)(2) of Section 27-29-5 or a provision such as the following: Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions within 15 days after the end of the month in which it learns of each change or addition.

(2) Any insurer which is subject to registration under this section shall register within 15 days after it becomes subject to registration, and annually thereafter by June 1 of each year for the previous calendar year, unless the commissioner for good cause shown extends the time for registration and, then, within such extended time. The commissioner may require any authorized insurer that is a member of an insurance holding company system which is not subject to registration under this section to furnish a copy of the registration statement, the summary specified in subsection (c), or other information filed by such insurance company with the insurance regulatory authority of domiciliary jurisdiction.

(b) Every insurer subject to registration shall file a registration statement on a form prescribed by the commissioner by rule which shall contain the following current information:

(1) The capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer.

(2) The identity of every member of the insurance holding company system.

(3) The following agreements in force, and transactions currently outstanding or which have occurred during the last calendar year between such insurer and its affiliates:

a. Loans, other investments or purchases, sales, or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates.

b. Purchases, sales, or exchanges of assets.

c. Transactions not in the ordinary course of business.

d. Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer’s assets to liability, other than insurance contracts entered into in the ordinary course of the insurer’s business.

e. All management agreements and service contracts and all cost-sharing arrangements.

f. Reinsurance agreements.

g. Dividends and other distributions to shareholders.

h. Consolidated tax allocation agreements.

(4) Any pledge of the insurer’s stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system.

(5) If requested by the commissioner, financial statements of or within an insurance holding company system, including all affiliates. Financial statements may include, but are not limited to, annual audited financial statements filed with the U.S. Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. An insurer required to file financial statements pursuant to this subdivision may satisfy the request by providing the commissioner with the most recently filed parent corporation financial statements that have been filed with the Securities Exchange Commission. Financial statements of insurer’s affiliates required to be filed with the commissioner may be filed by the insurer in the accounting standard utilized by the affiliate in its usual course of business at the time of the filing.

(6) Other matters concerning transactions between registered insurers and any affiliates as may be included, from time to time, in any registration forms adopted or approved by the commissioner.

(7) Statements that the insurer’s board of directors or an appropriate committee of the board oversees corporate governance and internal controls and that the insurer’s officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures.

(8) Any other information required by the commissioner by rule.

(c) All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.

(d) No information need be disclosed on the registration statement filed pursuant to subsection (b) if such information is not material for the purposes of this section. Unless the commissioner by rule, regulation, or order provides otherwise, sales, purchases, exchanges, loans, or extensions of credit or investments involving one-half of one percent or less of an insurer’s admitted assets as of December 31, next preceding, shall not be deemed material for purposes of this section. The definition of materiality provided in this subsection shall not apply for purposes of the Group Capital Calculation or the Liquidity Stress Test Framework.

(e) Subject to subsection (b) of Section 27-29-5, each registered insurer shall so report all dividends and other distributions to shareholders within 15 business days following the declaration thereof.

(f) Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to an insurer, where the information is reasonably necessary to enable the insurer to comply with the provisions of this chapter.

(g) The commissioner shall terminate the registration of any insurer which demonstrated that it no longer is a member of an insurance holding company system.

(h) The commissioner may require or allow two or more affiliated insurers subject to registration under this section to file a consolidated registration statement.

(i) The commissioner may allow an insurer that is authorized to do business in this state and which is part of an insurance holding company system to register on behalf of any affiliated insurer that is required to register under subsection (a) and to file all information and material required to be filed under this section.

(j) The provisions of this section shall not apply to any insurer, information, or transaction if, and to the extent that, the commissioner by rule, regulation, or order shall exempt the same from the provisions of this section.

(k) Any person may file with the commissioner a disclaimer of affiliation with any authorized insurer or a disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the person and the insurer, as well as the basis for disclaiming such affiliation. A disclaimer of affiliation shall be deemed to have been granted unless the commissioner, within 30 days following receipt of a complete disclaimer, notifies the filing party the disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted. The disclaiming party shall be relieved of its duty to register under this section if approval of the disclaimer has been granted by the commissioner, or if the disclaimer is deemed to have been approved.

(1) Enterprise Risk Filings.

(l) Enterprise Risk Report. The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person’s knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC.

(2)a. Group Capital Calculation. Except as provided in this subdivision, the ultimate controlling person of every insurer subject to registration shall concurrently file with the registration an annual group capital calculation as directed by the lead state commissioner. The report shall be completed in accordance with the NAIC Group Capital Calculation Instructions, which may permit the lead state commissioner to allow a controlling person that is not the ultimate controlling person to file the group capital calculation. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the commissioner in accordance with the procedures within the Financial Analysis Handbook adopted by the NAIC. The following insurance holding company systems described are exempt from filing the group capital calculation:

1. An insurance holding company system that has only one insurer within its holding company structure, that only writes business and is only licensed in its domestic state, and assumes no business from any other insurer.

2. An insurance holding company system that is required to perform a group capital calculation specified by the United States Federal Reserve Board. The lead state commissioner shall request the calculation from the Federal Reserve Board under the terms of information sharing agreements in effect. If the Federal Reserve Board cannot share the calculation with the lead state commissioner, the insurance holding company system is not exempt from the group capital calculation filing.

3. An insurance holding company system whose non-U.S. group-wide supervisor is located within a reciprocal jurisdiction as described in Section 27-5B-8.1, which recognizes the U.S. state regulatory approach to group supervision and group capital.

4. An insurance holding company system meeting both of the following:

(i) That provides information to the lead state which meets the requirements for accreditation under the NAIC financial standards and accreditation program, either directly or indirectly through the group-wide supervisor, who has determined such information is satisfactory to allow the lead state to comply with the NAIC group supervision approach, as detailed in the NAIC Financial Analysis Handbook.

(ii) Whose non-U.S. group-wide supervisor that is not in a reciprocal jurisdiction recognizes and accepts, as specified by the commissioner in regulation, the group capital calculation as the world-wide group capital assessment for U.S. insurance groups who operate in that jurisdiction.

b. Notwithstanding the provisions of subparagraphs a.3. and a.4., a lead state commissioner shall require the group capital calculation for U.S. operations of any non-U.S. based insurance holding company system when, after any necessary consultation with other supervisors or officials, the lead state commissioner deems it appropriate for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace.

c. Notwithstanding the exemptions from filing the group capital calculation stated in subparagraphs a.1. through a.4., the lead state commissioner may exempt the ultimate controlling person from filing the annual group capital calculation or to accept a limited group capital filing or report in accordance with criteria as specified by the commissioner in regulation.

d. If the lead state commissioner determines that an insurance holding company system no longer meets one or more of the requirements for an exemption from filing the group capital calculation under this section, the insurance holding company system shall file the group capital calculation at the next annual filing date, unless given an extension by the lead state commissioner based on reasonable grounds shown.

(3) Liquidity Stress Test.

a. The ultimate controlling person of every insurer subject to registration and also scoped into the NAIC Liquidity Stress Test Framework shall file the results of a specific year’s liquidity stress test. The filing shall be made to the lead state insurance commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC.

b. The NAIC Liquidity Stress Test Framework includes scope criteria applicable to a specific data year. These scope criteria are reviewed at least annually by the Financial Stability Task Force or its successor. Any change to the NAIC Liquidity Stress Test Framework, or to the data year for which the scope criteria are to be measured, shall be effective on January 1 of the year following the calendar year when such changes are adopted. Insurers meeting at least one threshold of the scope criteria are considered scoped into the NAIC Liquidity Stress Test Framework for the specified data year, unless the lead state insurance commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, determines the insurer should not be scoped into the framework for that data year. Similarly, insurers that do not trigger at least one threshold of the scope criteria are considered scoped out of the NAIC Liquidity Stress Test Framework for the specified data year, unless the lead state insurance commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, determines the insurer should be scoped into the framework for that data year.

c. Regulators should avoid having insurers scoped in and out of the NAIC Liquidity Stress Test Framework on a frequent basis. The lead state insurance commissioner, in consultation with the Financial Stability Task Force or its successor, shall assess this concern as part of the determination for an insurer.

d. The performance of, and filing of the results from, a specific year’s liquidity stress test shall comply with the NAIC Liquidity Stress Test Framework’s instructions and reporting templates for that year and any lead state insurance commissioner determinations, in conjunction with the Financial Stability Task Force or its successor, provided within the Framework.

(m) The failure to file a registration statement or any summary of the registration statement or enterprise risk filing required by this section within the time specified for filing shall be a violation of this section.
Ala. Code § 27-31-12 — Alabama Code / Title 27 / Chapter 31 / Section 27-31-12
Section 27-31-12 Bond of Attorney of Domestic Insurer - Deposit in Lieu Thereof
Status: in_force

In lieu of the bond required under Section 27-31-11, the attorney may maintain on deposit with the State Treasurer, through the office of the commissioner, a like amount in cash or in value of securities qualified for deposit under Section 27-6-3, and subject to the same conditions as the bond.
Ala. Code § 27-64-5 — Alabama Code / Title 27 / Chapter 64 / Section 27-64-5
Section 27-64-5 Payment of Premium Tax on Travel Insurance Programs; Documentation
Status: in_force

(a) A travel insurer shall pay premium tax, as provided in Section 27-4A-3, on travel insurance premiums paid by any of the following:

(1) An individual primary policyholder who is a resident of this state.

(2) A primary certificate holder who is a resident of this state who elects coverage under a group travel insurance policy.

(3) A blanket travel insurance policyholder who is a resident of, or has its principal place of business or the principal place of business of an affiliate or subsidiary that has purchased blanket travel insurance in this state for eligible blanket group members, subject to any apportionment rules that apply to the insurer across multiple taxing jurisdictions or that permit the insurer to allocate premiums on an apportioned basis in a reasonable and equitable manner in those jurisdictions.

(b) A travel insurer shall do both of the following:

(1) Document the state of residence or principal place of business of the policyholder or certificate holder, as required in subsection (a).

(2) Report as premium only the amount allocable to travel insurance and not any amounts received for travel assistance services or cancellation fee waivers.
Ala. Code § 27-29B-3 — Alabama Code / Title 27 / Chapter 29B / Section 27-29B-3
Section 27-29B-3 Disclosure Requirement
Status: in_force

(a) Not later than June 1 of each calendar year, an insurer or the insurance group of which the insurer is a member, shall submit to the commissioner a Corporate Governance Annual Disclosure that contains the information described in Section 27-29B-5. Notwithstanding any request from the commissioner made pursuant to subsection (c), if the insurer is a member of an insurance group, the insurer shall submit the report required by this section to the commissioner of the lead state for the insurance group in accordance with the laws of the lead state as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC.

(b) The CGAD shall include a signature of the insurer or insurance group’s chief executive officer or corporate secretary attesting to the best of that individual’s belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the board of directors of the insurer or the appropriate committee thereof.

(c) An insurer that is not required to submit a CGAD under this section shall submit a CGAD at the request of the commissioner.

(d) For purposes of completing the CGAD, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level, based on the structure of the system of corporate governance of the insurer or insurance group. The insurer or insurance group is encouraged to make the CGAD disclosures at the level at which the insurer’s or insurance group’s risk appetite is determined; or at the level at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised; or at the level at which legal liability for failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in level of reporting.

(e) The review of the CGAD and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent Financial Analysis Handbook as provided for in subsection (a).

(f) Insurers providing information substantially similar to the information required by this chapter in other documents provided to the commissioner, including proxy statements filed in conjunction with Form B requirements, or other state or federal filings provided to the department shall not be required to duplicate that information in the CGAD, but shall only be required to cross reference the document in which the information is included.
Ala. Code § 27-36A-15 — Alabama Code / Title 27 / Chapter 36A / Section 27-36A-15
Section 27-36A-15 Valuation Manual for Policies Issued on or After the Operative Date of the Valuation Manual
Status: in_force

(a) For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subsection (b) of Section 27-36A-3, except as provided under subsection (e) or (g) of this section, Section 27-36A-19, or Section 27-36A-20.

(b) The operative date of the valuation manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:

(1) The valuation manual has been adopted by the NAIC by an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever is greater.

(2) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than 75 percent of the direct premiums written as reported in the following annual statements submitted for 2008: Life, accident and health annual statements; health annual statements; or fraternal annual statements.

(3) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least 42 of the following 55 jurisdictions: The 50 states of the United States, American Samoa, the American Virgin Islands, the District of Columbia, Guam, and Puerto Rico.

(c) Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual shall be effective on January 1 following the date when both of the following have occurred:

(1) The change to the valuation manual has been adopted by the NAIC by an affirmative vote representing both of the following:

a. At least three-fourths of the members of the NAIC voting, but not less than a majority of the total membership.

b. Members of the NAIC representing jurisdictions totaling greater than 75 percent of the direct premiums written as reported in the following annual statements most recently available prior to the vote in paragraph a.: Life, accident, and health annual statements; health annual statements; or fraternal annual statements.

(2) The change to the valuation manual becomes effective pursuant to a regulation adopted by the commissioner.

(d) The valuation manual must specify all of the following:

(1) Minimum valuation standards for and definitions of the policies or contracts subject to subsection (b) of Section 27-36A-3. The minimum valuation standards shall be:

a. The commissioners reserve valuation method for life insurance contracts, other than annuity contracts, subject to subsection (b) of Section 27-36A-3.

b. The commissioners annuity reserve valuation method for annuity contracts subject to subsection (b) of Section 27-36A-3.

c. Minimum reserves for all other policies or contracts subject to subsection (b) of Section 27-36A-3.

(2) Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in subsection (a) of Section 27-36A-16 and the minimum valuation standards consistent with those requirements.

(3) For policies and contracts subject to a principle-based valuation under Section 27-36A-16:

a. Requirements for the format of reports to the commissioner under subdivision (3) of subsection (b) of Section 27-36A-16 and which shall include information necessary to determine if the valuation is appropriate and in compliance with this chapter.

b. Assumptions shall be prescribed for risks over which the company does not have significant control or influence.

c. Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures.

(4) For policies not subject to a principle-based valuation under Section 27-36A-16 the minimum valuation standard shall either:

a. Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual.

b. Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring.

(5) Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules, and internal controls.

(6) The data and form of the data required under Section 27-36A-17, with whom the data must be submitted, and may specify other requirements including data analyses and reporting of analyses.

(e) In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the commissioner, in compliance with this section, then the company shall, with respect to such requirements, comply with minimum valuation standards prescribed by the commissioner by regulation.

(f) The commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company’s compliance with any requirement set forth in this chapter. The commissioner may rely upon the opinion, regarding provisions contained within this chapter, of a qualified actuary engaged by the commissioner of another state, district, or territory of the United States. As used in this subsection, the term “engage” includes employment and contracting.

(g) The commissioner may require a company to change any assumption or method that in the opinion of the commissioner is necessary in order to comply with the requirements of the valuation manual or this chapter; and the company shall adjust the reserves as required by the commissioner. The commissioner may take other disciplinary action as permitted pursuant to this title.
Ala. Code § 27-60-2 — Alabama Code / Title 27 / Chapter 60 / Section 27-60-2
Section 27-60-2 Interstate Insurance Product Regulation Compact
Status: reserved

The State of Alabama hereby agrees to the following interstate compact known as the Interstate Insurance Product Regulation Compact:

ARTICLE I. PURPOSES.

The purposes of this compact are, through means of joint and cooperative action among the compacting states:

1. To promote and protect the interest of consumers of individual and group annuity, life insurance, disability income, and long-term care insurance products;

2. To develop uniform standards for insurance products covered under the compact;

3. To establish a central clearinghouse to receive and provide prompt review of insurance products covered under the compact and, in certain cases, advertisements related thereto, submitted by insurers authorized to do business in one or more compacting states;

4. To give appropriate regulatory approval to those product filings and advertisements satisfying the applicable uniform standard;

5. To improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the compact;

6. To create the Interstate Insurance Product Regulation Commission; and

7. To perform these and such other related functions as may be consistent with the state regulation of the business of insurance.

ARTICLE II. DEFINITIONS.

For purposes of this compact:

1. “Advertisement” means any material designed to create public interest in a product, or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy, as more specifically defined in the rules and operating procedures of the commission.

2. “Bylaws” mean those bylaws established by the commission for its governance, or for directing or controlling the actions or conduct of the commission.

3. “Compacting state” means any state which has enacted this compact legislation and which has not withdrawn pursuant to Section 1 of Article XIV, or been terminated pursuant to Section 2 of Article XIV.

4. “Commission” means the Interstate Insurance Product Regulation Commission established by this compact.

5. “Commissioner” means the chief insurance regulatory official of a state including, but not limited to, commissioner, superintendent, director, or administrator.

6. “Domiciliary state” means the state in which an insurer is incorporated or organized; or, in the case of an alien insurer, its state of entry.

7. “Insurer” means any entity licensed by a state to issue contracts of insurance for any of the lines of insurance covered by this compact.

8. “Member” means the person chosen by a compacting state as its representative to the commission, or his or her designee.

9. “Non-compacting state” means any state which is not at the time a compacting state.

10. “Operating procedures” mean procedures promulgated by the commission implementing a rule, uniform standard, or a provision of this compact.

11. “Product” means the form of a policy or contract, including any application, endorsement, or related form which is attached to and made a part of the policy or contract, and any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability income, or long-term care insurance product that an insurer is authorized to issue.

12. “Rule” means a statement of general or particular applicability and future effect promulgated by the commission, including a uniform standard developed pursuant to Article VII, designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of the commission, which shall have the force and effect of law in the compacting states.

13. “State” means any state, district, or territory of the United States of America.

14. “Third party filer” means an entity that submits a product filing to the commission on behalf of an insurer.

15. “Uniform standard” means a standard adopted by the commission for a product line, pursuant to Article VII, and shall include all of the product requirements in aggregate. Each uniform standard shall be construed, whether express or implied, to prohibit the use of any inconsistent, misleading, or ambiguous provisions in a product and the form of the product made available to the public shall not be unfair, inequitable, or against public policy as determined by the commission.

ARTICLE III. ESTABLISHMENT OF THE COMMISSION AND VENUE.

1. The compacting states hereby create and establish a joint public entity known as the Interstate Insurance Product Regulation Commission. Pursuant to Article IV, the commission shall have the power to develop uniform standards for product lines, receive and provide prompt review of products filed therewith, and give approval to those product filings satisfying applicable uniform standards. It is not intended for the commission to be the exclusive entity for receipt and review of insurance product filings. Nothing herein shall prohibit any insurer from filing its product in any state wherein the insurer is licensed to conduct the business of insurance, and any such filing shall be subject to the laws of the state where filed.

2. The commission is a body corporate and politic, and an instrumentality of the compacting states.

3. The commission is solely responsible for its liabilities except as otherwise specifically provided in this compact.

4. Venue is proper and judicial proceedings by or against the commission shall be brought solely and exclusively in a court of competent jurisdiction where the principal office of the commission is located.

ARTICLE IV. POWERS OF THE COMMISSION.

The commission shall have all of the following powers:

1. To promulgate rules, pursuant to Article VII, which shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in this compact.

2. To exercise its rule making authority and establish reasonable uniform standards for products covered under the compact, and advertisements related thereto, which shall have the force and effect of law and shall be binding in the compacting states, but only for those products filed with the commission. A compacting state shall have the right to opt out of such uniform standard pursuant to Article VII, to the extent and in the manner provided in this compact, and any uniform standard established by the commission for long-term care insurance products may provide the same or greater protections for consumers as, but shall not provide less than, those protections set forth in the National Association of Insurance Commissioners’ Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, respectively, adopted as of 2001. The commission shall consider whether any subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the NAIC require amending of the uniform standards established by the commission for long-term care insurance products.

3. To receive and review in an expeditious manner products filed with the commission, and rate filings for disability income and long-term care insurance products, and give approval of those products and rate filings that satisfy the applicable uniform standard, where such approval shall have the force and effect of law and be binding on the compacting states to the extent and in the manner provided in this compact.

4. To receive and review in an expeditious manner advertisements relating to long-term care insurance products for which uniform standards have been adopted by the commission, and give approval to any advertisement that satisfies the applicable uniform standard. For any product covered under this compact, other than long-term care insurance products, the commission shall have the authority to require an insurer to submit all or any part of its advertisements with respect to that product for review or approval prior to use, if the commission determines that the nature of the product is such that an advertisement of the product could have the capacity or tendency to mislead the public. The actions of the commission as provided in this section shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in this compact.

5. To exercise its rule making authority and designate products and advertisements that may be subject to a self-certification process without the need for prior approval by the commission.

6. To promulgate operating procedures, pursuant to Article VII, which shall be binding in the compacting states to the extent and in the manner provided in this compact.

7. To bring and prosecute legal proceedings or actions in its name as the commission. The standing of any state insurance department to sue or be sued under applicable law shall not be affected.

8. To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence.

9. To establish and maintain offices.

10. To purchase and maintain insurance and bonds.

11. To borrow, accept, or contract for services of personnel including, but not limited to, employees of a compacting state.

12. To hire employees, professionals, or specialists, and elect or appoint officers, and to fix their compensation, define their duties, give them appropriate authority to carry out the purposes of this compact, and determine their qualifications, and to establish personnel policies and programs of the commission relating to, among other things, conflicts of interest, rates of compensation, and qualifications of personnel.

13. To accept any and all appropriate donations and grants of money, equipment, supplies, materials, and services and to receive, utilize, and dispose of the same. At all times the commission shall strive to avoid any appearance of impropriety.

14. To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold, improve, or use any property, real, personal, or mixed. At all times the commission shall strive to avoid any appearance of impropriety.

15. To sell, convey, mortgage, pledge, lease, exchange, abandon, or otherwise dispose of any property, real, personal, or mixed.

16. To remit filing fees to compacting states as may be set forth in the bylaws, rules, or operating procedures.

17. To enforce compliance by compacting states with rules, uniform standards, operating procedures, and bylaws.

18. To provide for dispute resolution among compacting states.

19. To advise compacting states on issues relating to insurers domiciled or doing business in non-compacting jurisdictions, consistent with the purposes of this compact.

20. To provide advice and training to those personnel in state insurance departments responsible for product review, and to be a resource for state insurance departments.

21. To establish a budget and make expenditures.

22. To borrow money.

23. To appoint committees, including advisory committees comprising members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives, and such other interested persons as may be designated in the bylaws.

24. To provide and receive information from, and to cooperate with, law enforcement agencies.

25. To adopt and use a corporate seal.

26. To perform such other functions as may be necessary or appropriate to achieve the purposes of this compact consistent with the state regulation of the business of insurance.

ARTICLE V. ORGANIZATION OF THE COMMISSION.

1. Membership, voting, and bylaws.

a. Each compacting state shall have and be limited to one member. Each member shall be qualified to serve in that capacity pursuant to applicable law of the compacting state. Any member may be removed or suspended from office as provided by the law of the state from which he or she shall be appointed. Any vacancy occurring in the commission shall be filled in accordance with the laws of the compacting state wherein the vacancy exists. Nothing herein shall be construed to affect the manner in which a compacting state determines the election or appointment and qualification of its own commissioner.

b. Each member shall be entitled to one vote and shall have an opportunity to participate in the governance of the commission in accordance with the bylaws. Notwithstanding any provision herein to the contrary, no action of the commission with respect to the promulgation of a uniform standard shall be effective unless two-thirds of the members vote in favor thereof.

c. The commission, by a majority of the members, shall prescribe bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of the compact including, but not limited to, all of the following:

(i) Establishing the fiscal year of the commission.

(ii) Providing reasonable procedures for appointing and electing members, as well as holding meetings, of the management committee.

(iii) Providing reasonable standards and procedures for the establishment and meetings of other committees, and governing any general or specific delegation of any authority or function of the commission.

(iv) Providing reasonable procedures for calling and conducting meetings of the commission that consist of a majority of commission members, ensuring reasonable advance notice of each such meeting, and providing for the right of citizens to attend each such meeting with enumerated exceptions designed to protect the interest of the public, the privacy of individuals, and proprietary information of insurers, including trade secrets. The commission may meet in camera only after a majority of the entire membership votes to close a meeting en toto or in part. As soon as practicable, the commission shall make public a copy of the vote to close the meeting revealing the vote of each member with no proxy votes allowed and votes taken during such meeting.

(v) Establishing the titles, duties and authority, and reasonable procedures for the election of the officers of the commission.

(vi) Providing reasonable standards and procedures for the establishment of the personnel policies and programs of the commission. Notwithstanding any civil service or other similar laws of any compacting state, the bylaws shall exclusively govern the personnel policies and programs of the commission.

(vii) Promulgating a code of ethics to address permissible and prohibited activities of commission members and employees.

(viii) Providing a mechanism for winding up the operations of the commission and the equitable disposition of any surplus funds that may exist after the termination of the compact after the payment or reserving, or both, of all of its debts and obligations.

d. The commission shall publish its bylaws in a convenient form and file a copy thereof, and a copy of any amendment thereto, with the appropriate agency or officer in each of the compacting states.

2. Management committee, officers, and personnel.

a. A management committee comprising no more than 14 members shall be established as follows:

(i) One member from each of the six compacting states with the largest premium volume for individual and group annuities, life, disability income, and long-term care insurance products, determined from the records of the NAIC for the prior year.

(ii) Four members from those compacting states with at least two percent of the market based on the premium volume described above, other than the six compacting states with the largest premium volume, selected on a rotating basis as provided in the bylaws.

(iii) Four members from those compacting states with less than two percent of the market, based on the premium volume described above, with one selected from each of the four zone regions of the NAIC as provided in the bylaws.

b. The management committee shall have such authority and duties as may be set forth in the bylaws including, but not limited to, all of the following:

(i) Managing the affairs of the commission in a manner consistent with the bylaws and purposes of the commission.

(ii) Establishing and overseeing an organizational structure within, and appropriate procedures for, the commission to provide for the creation of uniform standards and other rules, receipt and review of product filings, administrative and technical support functions, review of decisions regarding the disapproval of a product filing, and the review of elections made by a compacting state to opt out of a uniform standard. A uniform standard shall not be submitted to the compacting states for adoption unless approved by two-thirds of the members of the management committee.

(iii) Overseeing the offices of the commission.

(iv) Planning, implementing, and coordinating communications and activities with other state, federal, and local government organizations in order to advance the goals of the commission.

c. The commission shall elect annually officers from the management committee, with each having such authority and duties, as may be specified in the bylaws.

d. The management committee, subject to the approval of the commission, may appoint or retain an executive director for such period, upon such terms and conditions, and for such compensation as the commission may deem appropriate. The executive director shall serve as secretary to the commission, but shall not be a member of the commission. The executive director shall hire and supervise such other staff as may be authorized by the commission.

3. Legislative and advisory committees.

a. A legislative committee, comprising state legislators or their designees, shall be established to monitor the operations of, and make recommendations to, the commission, including the management committee. The manner of selection and term of any legislative committee member shall be as set forth in the bylaws. Prior to the adoption by the commission of any uniform standard, revision to the bylaws, annual budget, or other significant matter as may be provided in the bylaws, the management committee shall consult with and report to the legislative committee.

b. The commission shall establish two advisory committees, one of which shall comprise consumer representatives independent of the insurance industry, and the other comprising insurance industry representatives.

c. The commission may establish additional advisory committees as its bylaws may provide for the carrying out of its functions.

4. Corporate records of the commission.

The commission shall maintain its corporate books and records in accordance with the bylaws.

5. Qualified immunity, defense, and indemnification.

a. The members, officers, executive director, employees, and representatives of the commission shall be immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error, or omission that occurred, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties, or responsibilities. Nothing in this paragraph shall be construed to protect any such person from suit or liability, or both, for any damage, loss, injury, or liability caused by the intentional or willful and wanton misconduct of that person.

b. The commission shall defend any member, officer, executive director, employee, or representative of the commission in any civil action seeking to impose liability arising out of any actual or alleged act, error, or omission that occurred within the scope of commission employment, duties, or responsibilities, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties, or responsibilities provided that the actual or alleged act, error, or omission did not result from the intentional or willful and wanton misconduct of that person. Nothing herein shall be construed to prohibit that person from retaining his or her own counsel.

c. The commission shall indemnify and hold harmless any member, officer, executive director, employee, or representative of the commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error, or omission that occurred within the scope of commission employment, duties, or responsibilities, or that such person had a reasonable basis for believing occurred within the scope of commission employment, duties, or responsibilities, provided, that the actual or alleged act, error, or omission did not result from the intentional or willful and wanton misconduct of that person.

ARTICLE VI. MEETINGS AND ACTS OF THE COMMISSION.

1. The commission shall meet and take such actions as are consistent with this compact and the bylaws.

2. Each member of the commission shall have the right and power to cast a vote to which that compacting state is entitled and to participate in the business and affairs of the commission. A member shall vote in person or by such other means as provided in the bylaws. The bylaws may provide for participation by members in meetings by telephone or other means of communication.

3. The commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the bylaws.

ARTICLE VII. RULES AND OPERATING PROCEDURES:

RULE MAKING FUNCTIONS OF THE COMMISSION AND OPTING OUT OF UNIFORM STANDARDS.

1. Rule making authority. The commission shall promulgate reasonable rules, including uniform standards, and operating procedures in order to effectively and efficiently achieve the purposes of this compact. Notwithstanding the foregoing, in the event the commission exercises its rule making authority in a manner that is beyond the scope of the purposes of this compact, or the powers granted hereunder, then such an action by the commission shall be invalid and have no force and effect.

2. Rule making procedure. Rules and operating procedures shall be made pursuant to a rule making process that conforms to the Model State Administrative Procedure Act of 1981, as amended, as may be appropriate to the operations of the commission. Before the commission adopts a uniform standard, the commission shall give written notice to the relevant state legislative committee or committees in each compacting state responsible for insurance issues of its intention to adopt the uniform standard. The commission in adopting a uniform standard shall consider fully all submitted materials and issue a concise explanation of its decision.

3. Effective date and opt out of a uniform standard. A uniform standard shall become effective 90 days after its promulgation by the commission or such later date as the commission may determine. A compacting state may opt out of a uniform standard as provided in this article. The term opt out shall be defined as any action by a compacting state to decline to adopt or participate in a promulgated uniform standard. All other rules and operating procedures, and amendments thereto, shall become effective as of the date specified in each rule, operating procedure, or amendment.

4. Opt out procedure. A compacting state may opt out of a uniform standard, either by legislation or regulation duly promulgated by the insurance department under the administrative procedure act of the compacting state. If a compacting state elects to opt out of a uniform standard by regulation, it shall give written notice to the commission no later than 10 business days after the uniform standard is promulgated, or at the time the state becomes a compacting state and find that the uniform standard does not provide reasonable protections to the citizens of the state, given the conditions in the state. The commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the state which warrant a departure from the uniform standard and determining that the uniform standard would not reasonably protect the citizens of the state. The commissioner shall consider and balance the following factors and find that the conditions in the state and needs of the citizens of the state outweigh: (i) The intent of the legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the products subject to this compact; and (ii) the presumption that a uniform standard adopted by the commission provides reasonable protections to consumers of the relevant product.

Notwithstanding the foregoing, a compacting state, at the time of its enactment of this compact, may prospectively opt out of all uniform standards involving long-term care insurance products by expressly providing for such opt out in the enacted compact, and such an opt out shall not be treated as a material variance in the offer or acceptance of any state to participate in this compact. Such an opt out shall be effective at the time of enactment of this compact by the compacting state and shall apply to all existing uniform standards involving long-term care insurance products and those subsequently promulgated.

5. Effect of opt out. If a compacting state elects to opt out of a uniform standard, the uniform standard shall remain applicable in the compacting state electing to opt out until such time as the opt out legislation is enacted into law or the regulation opting out becomes effective.

Once the opt out of a uniform standard by a compacting state becomes effective as provided under the laws of that state, the uniform standard shall have no further force and effect in that state unless and until the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective under the laws of the state. If a compacting state opts out of a uniform standard after the uniform standard has been made effective in that state, the opt out shall have the same prospective effect as provided under Article XIV for withdrawals.

6. Stay of uniform standard. If a compacting state has formally initiated the process of opting out of a uniform standard by regulation, and while the regulatory opt out is pending, the compacting state may petition the commission, at least 15 days before the effective date of the uniform standard, to stay the effectiveness of the uniform standard in that state. The commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the commission, the stay or extension thereof may postpone the effective date by up to 90 days, unless affirmatively extended by the commission. A stay may not be permitted to remain in effect for more than one year unless the compacting state can show extraordinary circumstances which warrant a continuance of the stay including, but not limited to, the existence of a legal challenge which prevents the compacting state from opting out. A stay may be terminated by the commission upon notice that the rule making process has been terminated.

7. Not later than 30 days after a rule or operating procedure is promulgated, any person may file a petition for judicial review of the rule or operating procedure. The filing of such a petition shall not stay or otherwise prevent the rule or operating procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the commission consistent with applicable law and shall not find the rule or operating procedure to be unlawful if the rule or operating procedure represents a reasonable exercise of the authority of the commission.

ARTICLE VIII. COMMISSION RECORDS AND ENFORCEMENT.

1. The commission shall promulgate rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and records involving the privacy of individuals and trade secrets of insurers. The commission may promulgate additional rules under which it may make available to federal and state agencies, including law enforcement agencies, records and information otherwise exempt from disclosure, and may enter into agreements with such agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions.

2. Except as to privileged records, data, and information, the laws of any compacting state pertaining to confidentiality or nondisclosure shall not relieve any compacting state commissioner of the duty to disclose any relevant records, data, or information to the commission. Disclosure to the commission shall not be deemed to waive or otherwise affect any confidentiality requirement. Except as otherwise expressly provided in this compact, the commission shall not be subject to the laws of the compacting state pertaining to confidentiality and nondisclosure with respect to records, data, and information in its possession. Confidential information of the commission shall remain confidential after such information is provided to any commissioner.

3. The commission shall monitor compacting states for compliance with duly adopted bylaws, rules, including uniform standards, and operating procedures. The commission shall notify any noncomplying compacting state in writing of its noncompliance with commission bylaws, rules, or operating procedures. If a noncomplying compacting state fails to remedy its noncompliance within the time specified in the notice of noncompliance, the compacting state shall be deemed to be in default as set forth in Article XIV.

4. The commissioner of any state in which an insurer is authorized to do business, or is conducting the business of insurance, shall continue to exercise his or her authority to oversee the market regulation of the activities of the insurer in accordance with the law of that state. The enforcement of compliance with the compact by the commissioner is governed by the following provisions:

a. With respect to the commissioner’s market regulation of a product or advertisement that is approved or certified to the commission, the content of the product or advertisement shall not constitute a violation of the provisions, standards, or requirements of the compact except upon a final order of the commission, issued at the request of a commissioner after prior notice to the insurer and an opportunity for hearing before the commission.

b. Before a commissioner may bring an action for violation of any provision, standard, or requirement of the compact relating to the use of an advertisement not approved or certified to the commission, the commission, or an authorized commission officer or employee, shall authorize the action. However, authorization pursuant to this paragraph does not require notice to the insurer, opportunity for hearing, or disclosure of requests for authorization or records of the action of the commission on such requests.

ARTICLE IX. DISPUTE RESOLUTION.

The commission, upon the request of a member, shall attempt to resolve any disputes or other issues that are subject to this compact and which may arise between two or more compacting states, or between compacting states and non-compacting states, and the commission shall promulgate an operating procedure providing for resolution of such disputes.

ARTICLE X. PRODUCT FILING AND APPROVAL.

1. Insurers and third party filers seeking to have a product approved by the commission shall file the product with, and pay applicable filing fees to, the commission. Nothing in this compact shall be construed to restrict or otherwise prevent an insurer from filing its product with the insurance department in any state wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the states where filed.

2. The commission shall establish appropriate filing and review processes and procedures pursuant to commission rules and operating procedures. Notwithstanding any provision herein to the contrary, the commission shall promulgate rules to establish conditions and procedures under which the commission will provide public access to product filing information. In establishing such rules, the commission shall consider the interests of the public in having access to such information, as well as protection of personal medical and financial information and trade secrets, that may be contained in a product filing or supporting information.

3. Any product approved by the commission may be sold or otherwise issued in those compacting states for which the insurer is legally authorized to do business.

ARTICLE XI. REVIEW OF COMMISSION DECISIONS REGARDING FILINGS.

1. Not later than 30 days after the commission has given notice of a disapproved product or advertisement filed with the commission, the insurer or third party filer whose filing was disapproved may appeal the determination to a review panel appointed by the commission. The commission shall promulgate rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the commission, in disapproving a product or advertisement filed with the commission, acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in accordance with Article III.

2. The commission shall have authority to monitor, review, and reconsider products and advertisements subsequent to their filing or approval upon a finding that the product or advertisement does not meet the relevant uniform standard. Where appropriate, the commission may withdraw or modify its approval after proper notice and hearing, subject to the appeal process in Section 1.

ARTICLE XII. FINANCE.

1. The commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the commission may accept contributions and other forms of funding from the National Association of Insurance Commissioners, compacting states, and other sources. Contributions and other forms of funding from other sources shall be of such a nature that the independence of the commission concerning the performance of its duties shall not be compromised.

2. The commission shall collect a filing fee from each insurer and third party filer filing a product with the commission to cover the cost of the operations and activities of the commission and its staff in a total amount sufficient to cover the annual budget of the commission.

3. The budget of the commission for a fiscal year shall not be approved until it has been subject to notice and comment as set forth in Article VII.

4. The commission shall be exempt from all taxation in and by the compacting states.

5. The commission shall not pledge the credit of any compacting state, except by and with the appropriate legal authority of that compacting state.

6. The commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the commission shall be subject to the accounting procedures established under its bylaws. The financial accounts and reports including the system of internal controls and procedures of the commission shall be audited annually by an independent certified public accountant. Upon the determination of the commission, but no less frequently than every three years, the review of the independent auditor shall include a management and performance audit of the commission. The commission shall make an annual report to the governor and legislature of the compacting states, which shall include a report of the independent audit. The internal accounts of the commission shall not be confidential and such materials may be shared with the commissioner of any compacting state upon request. Any work papers related to any internal or independent audit and any information regarding the privacy of individuals and proprietary information of insurers, including trade secrets, shall remain confidential.

7. No compacting state shall have any claim to or ownership of any property held by or vested in the commission or to any commission funds held pursuant to this compact.

ARTICLE XIII. COMPACTING STATES, EFFECTIVE DATE, AND AMENDMENT.

1. Any state is eligible to become a compacting state.

2. The compact shall become effective and binding upon legislative enactment of the compact into law by two compacting states. The commission shall become effective for purposes of adopting uniform standards for, reviewing, and giving approval or disapproval of, products filed with the commission that satisfy applicable uniform standards only after 26 states are compacting states or, alternatively, by states representing greater than 40 percent of the premium volume for life insurance, annuity, disability income, and long-term care insurance products, based on records of the NAIC for the prior year. Thereafter, it shall become effective and binding as to any other compacting state upon enactment of the compact into law by that state.

3. Amendments to the compact may be proposed by the commission for enactment by the compacting states. No amendment shall become effective and binding upon the commission and the compacting states unless and until all compacting states enact the amendment into law.

ARTICLE XIV. WITHDRAWAL, DEFAULT, AND TERMINATION.

1. Withdrawal.

a. Once effective, the compact shall continue in force and remain binding upon each and every compacting state. A compacting state may withdraw from the compact (“withdrawing state”) by enacting a statute specifically repealing the statute which enacted the compact into law.

b. The effective date of withdrawal is the effective date of the repealing statute. However, the withdrawal shall not apply to any product filings approved or self-certified, or any advertisement of such products, as of the date the repealing statute becomes effective, except by mutual agreement of the commission and the withdrawing state unless the approval is rescinded by the withdrawing state as provided in subsection e.

c. The commissioner of the withdrawing state shall immediately notify the management committee in writing upon the introduction of legislation repealing this compact in the withdrawing state.

d. The commission shall notify the other compacting states of the introduction of such legislation within 10 days after its receipt of notice thereof.

e. The withdrawing state is responsible for all obligations, duties, and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the commission and the withdrawing state. The approval of the commission of products and advertisements prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the withdrawing state, unless formally rescinded by the withdrawing state in the same manner as provided by the laws of the withdrawing state for the prospective disapproval of products or advertisements previously approved under state law.

f. Reinstatement following withdrawal of any compacting state shall occur upon the effective date of the withdrawing state reenacting the compact.

2. Default.

a. If the commission determines that any compacting state has at any time defaulted (“defaulting state”) in the performance of any of its obligations or responsibilities under this compact, the bylaws, or duly promulgated rules or operating procedures, then, after notice and hearing as set forth in the bylaws, all rights, privileges, and benefits conferred by this compact on the defaulting state shall be suspended from the effective date of default as fixed by the commission. The grounds for default include, but are not limited to, failure of a compacting state to perform its obligations or responsibilities, and any other grounds designated in commission rules. The commission shall immediately notify the defaulting state in writing of the suspension of the defaulting state pending a cure of the default. The commission shall stipulate the conditions and the time period within which the defaulting state must cure its default. If the defaulting state fails to cure the default within the time period specified by the commission, the defaulting state shall be terminated from the compact and all rights, privileges, and benefits conferred by this compact shall be terminated from the effective date of termination.

b. Product approvals by the commission or product self-certifications, or any advertisement in connection with such product, that are in force on the effective date of termination shall remain in force in the defaulting state in the same manner as if the defaulting state had withdrawn voluntarily pursuant to Section 1.

c. Reinstatement following termination of any compacting state requires a reenactment of the compact.

3. Dissolution of compact.

a. The compact dissolves effective upon the date of the withdrawal or default of the compacting state which reduces membership in the compact to one compacting state.

b. Upon the dissolution of this compact, the compact becomes null and void and shall be of no further force or effect, and the business and affairs of the commission shall be wound up and any surplus funds shall be distributed in accordance with the bylaws.

ARTICLE XV. SEVERABILITY AND CONSTRUCTION.

1. The provisions of this compact shall be severable; and if any phrase, clause, sentence, or provision is deemed unenforceable, the remaining provisions of the compact shall be enforceable.

2. The provisions of this compact shall be liberally construed to effectuate its purposes.

ARTICLE XVI. BINDING EFFECT OF COMPACT AND OTHER LAWS.

1. Other laws.

a. Nothing herein prevents the enforcement of any other law of a compacting state, except as provided in paragraph b.

b. For any product approved by or certified to the commission, the rules, uniform standards, and any other requirements of the commission shall constitute the exclusive provisions applicable to the content, approval, and certification of such products. For an advertisement that is subject to the authority of the commission, any rule, uniform standard, or other requirement of the commission which governs the content of the advertisement shall constitute the exclusive provision that a commissioner may apply to the content of the advertisement. Notwithstanding the foregoing, no action taken by the commission shall abrogate or restrict any of the following:

(i) The access of any person to state courts.

(ii) Remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the product.

(iii) State law relating to the construction of insurance contract.

(iv) The authority of the attorney general of the state including, but not limited to, maintaining any actions or proceedings, as authorized by law.

c. All insurance products filed with individual states shall be subject to the laws of those states.

2. Binding effect of this compact.

a. All lawful actions of the commission, including all rules and operating procedures promulgated by the commission, are binding upon the compacting states.

b. All agreements between the commission and the compacting states are binding in accordance with their terms.

c. Upon the request of a party to a conflict over the meaning or interpretation of commission actions, and upon a majority vote of the compacting states, the commission may issue advisory opinions regarding the meaning or interpretation in dispute.

d. In the event any provision of this compact exceeds the constitutional limits imposed on the legislature of any compacting state, the obligations, duties, powers, or jurisdiction sought to be conferred by that provision upon the commission shall be ineffective as to that compacting state, and those obligations, duties, powers, or jurisdiction shall remain in the compacting state and shall be exercised by the agency thereof to which those obligations, duties, powers, or jurisdiction are delegated by law in effect at the time this compact becomes effective.
Ala. Code § 27-26-25 — Alabama Code / Title 27 / Chapter 26 / Section 27-26-25
Section 27-26-25 Plan of Operation
Status: reserved

Repealed by Act 2015-70 effective April 21, 2015.
Ala. Code § 27-43-2 — Alabama Code / Title 27 / Chapter 43 / Section 27-43-2
Section 27-43-2 Purpose of Chapter
Status: in_force

The purpose of this chapter is to authorize state certification and regulation of organizations which provide programs for the payment of the costs of legal services.
Ala. Code § 27-6-16 — Alabama Code / Title 27 / Chapter 6 / Section 27-6-16
Section 27-6-16 Release of Deposit - Filing of Statement; Authorization of Release
Status: in_force

(a) Before authorizing the release of any deposit or excess portion thereof to the insurer, as provided in Section 27-6-15, the commissioner shall require the insurer to file with him a statement under its seal and the oath of its chief executive officer, or of its United States manager in the case of an alien insurer, setting forth the facts upon which it bases its entitlement to such release.

(b) If release of the deposit is claimed by the insurer upon the ground that its liabilities in this state, as to which the deposit was originally made and is held, have been assumed by another insurer authorized to transact insurance in this state, the insurer shall file with the commissioner a copy of the contract or agreement of such reinsurance.

(c) Upon being satisfied by such statement and such other information and evidence as he may reasonably require and by such examination, if any, of the affairs of the insurer as he deems advisable to make that the insurer is entitled to the release of its deposits or excess portions thereof as provided in Section 27-6-15, the commissioner shall authorize the Treasurer or the trustee bank or trust company in the case of deposits of title insurers made under Section 27-3-13 to release the deposit or excess portion thereof to the insurer or its authorized representative. The commissioner shall have no liability as to any such release so made by him in good faith.
Ala. Code § 27-65-6 — Alabama Code / Title 27 / Chapter 65 / Section 27-65-6
Section 27-65-6
Status: reserved

This chapter repealed on June 1, 2029.
Ala. Code § 27-19-51 — Alabama Code / Title 27 / Chapter 19 / Section 27-19-51
Section 27-19-51 Purpose of Article
Status: in_force

The purpose of this article is to establish certain definitions, policy provisions, anticipated loss ratio standards, and disclosure requirements applicable to group and individual Medicare supplement disability policies and to authorize the implementation of these requirements through regulations promulgated by the Commissioner of Insurance consistent with the uniform standards developed by the National Association of Insurance Commissioners to meet the standards enacted in Public Law 96-265 (Laws 1980).
Ala. Code § 27-39-3 — Alabama Code / Title 27 / Chapter 39 / Section 27-39-3
Section 27-39-3 Incorporation and License Requirements
Status: in_force

No automobile club or association shall do, or offer to do, business in the state unless the same shall be organized as a domestic or foreign corporation and shall be licensed by the commissioner.
Ala. Code § 27-5A-7 — Alabama Code / Title 27 / Chapter 5A / Section 27-5A-7
Section 27-5A-7 Required Contract Provisions; Reinsurance Intermediary-Managers
Status: in_force

Transactions between a reinsurance intermediary-manager and the reinsurer it represents in that capacity shall only be entered into pursuant to a written contract, specifying the responsibilities of each party, which shall be approved by the reinsurer’s board of directors. At least 30 days before a reinsurer assumes or cedes business through a producer, a true copy of the approved contract shall be filed with the commissioner for approval. The contract shall, at a minimum, provide that:

(1) The reinsurer may terminate the contract for cause upon written notice to the reinsurance intermediary-manager. The reinsurer may immediately suspend the authority of the reinsurance intermediary-manager to assume or cede business during the pendency of any dispute regarding the cause for termination.

(2) The reinsurance intermediary-manager shall render accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to the reinsurance intermediary-manager, and remit all funds due under the contract to the reinsurer on not less than a monthly basis.

(3) All funds collected for the reinsurer’s account shall be held by the reinsurance intermediary-manager in a fiduciary capacity in a bank which is a qualified U.S. financial institution as defined herein. The reinsurance intermediary-manager may retain no more than three months estimated claims payments and allocated loss adjustment expenses. The reinsurance intermediary-manager shall maintain a separate bank account for each reinsurer that it represents.

(4) For at least 10 years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-manager, the reinsurance intermediary-manager shall keep a complete record for each transaction showing all of the following:

a. The type of contract, limits, underwriting restrictions, classes, or risks and territory.

b. Period of coverage, including effective and expiration dates, cancellation provisions, and notice required of cancellation, and disposition of outstanding reserves on covered risks.

c. Reporting and settlement requirements of balances.

d. Rate used to compute the reinsurance premium.

e. Names and addresses of reinsurers.

f. Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-manager.

g. Related correspondence and memoranda.

h. Proof of placement.

i. Details regarding retrocessions handled by the reinsurance intermediary-manager, as permitted by subsection (d) of Section 27-5A-9, including the identity of retrocessionaires and percentage of each contract assumed or ceded.

j. Financial records, including, but not limited to, premium and loss accounts.

k. When the reinsurance intermediary-manager places a reinsurance contract on behalf of a ceding insurer:

1. Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk.

2. If placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative.

(5) The reinsurer shall have access and the right to copy all accounts and records maintained by the reinsurance intermediary-manager related to its business in a form usable by the reinsurer.

(6) The contract cannot be assigned in whole or in part by the reinsurance intermediary-manager.

(7) The reinsurance intermediary-manager shall comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection, or cession of all risks.

(8) Sets forth the rates, terms, and purposes of commissions, charges, and other fees which the reinsurance intermediary-manager may levy against the reinsurer.

(9) If the contract permits the reinsurance intermediary-manager to settle claims on behalf of the reinsurer:

a. All claims shall be reported to the reinsurer in a timely manner.

b. A copy of the claim file shall be sent to the reinsurer at its request or as soon as it becomes known that the claim:

1. Has the potential to exceed the lesser of an amount determined by the commissioner or the limit set by the reinsurer.

2. Involves a coverage dispute.

3. May exceed the reinsurance intermediary-manager’s claims settlement authority.

4. Is open for more than six months.

5. Is closed by payment of the lesser of an amount set by the commissioner or an amount set by the reinsurer.

c. All claim files shall be the joint property of the reinsurer and reinsurance intermediary-manager. However, upon an order of liquidation of the reinsurer, the files shall become the sole property of the reinsurer or its estate; the reinsurance intermediary-manager shall have reasonable access to and the right to copy the files on a timely basis.

d. Any settlement authority granted to the reinsurance intermediary-manager may be terminated for cause upon the reinsurer’s written notice to the reinsurance intermediary-manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination.

(10) If the contract provides for a sharing of interim profits by the reinsurance intermediary-manager, that the interim profits shall not be paid until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business (or a later period set by the commissioner for specified lines of insurance), and not until the adequacy of reserves on remaining claims has been verified pursuant to subsection (c) of Section 27-5A-9.

(11) The reinsurance intermediary-manager shall annually provide the reinsurer with a statement of its financial condition prepared by an independent certified accountant.

(12) The reinsurer shall periodically (at least semiannually) conduct an on-site review of the underwriting and claims processing operations of the reinsurance intermediary-manager.

(13) The reinsurance intermediary-manager shall disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with such insurer pursuant to this contract.

(14) Within the scope of its actual or apparent authority the acts of the reinsurance intermediary-manager shall be deemed to be the acts of the reinsurer on whose behalf it is acting.
Ala. Code § 27-15-83 — Alabama Code / Title 27 / Chapter 15 / Section 27-15-83
Section 27-15-83 Applicability of Article
Status: in_force

For purposes of determining the applicability of this article, the age at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.
Ala. Code § 27-25-4.1 — Alabama Code / Title 27 / Chapter 25 / Section 27-25-4.1
Section 27-25-4.1 Title Agent Qualifications
Status: in_force

(a) The commissioner may contract with non-governmental entities, including NAIC, to perform any ministerial functions, including the collection of fees and data, related to licensing that the commissioner may deem appropriate. The commissioner may require that license applications, license renewal applications, notices of appointments and appointment terminations, and supporting documentation be filed and all required fees and charges be paid electronically through systems operated or maintained by the non-governmental entities.

(b) An individual applying for a title insurance agent license shall apply to the commissioner on the appropriate NAIC Uniform Individual Application and declare under penalty of suspension, revocation, or refusal of the license that the statements made in the application are true, correct, and complete to the best of the individual’s knowledge and belief. Before approving the application, the commissioner shall find that the individual meets all of the following :

(1) Is at least 19 years of age.

(2) Is a bona fide resident and citizen of this state or is a full-time employee of a duly licensed title insurance agent whose principal place of business is physically located in this state.

(3) Has not committed any act that is a ground for probation, suspension, revocation, or refusal of license as set forth in Section 27-25-4.5.

(4) Has successfully passed the examination for title insurance as required in Section 27-25-4.3.

(5) Has paid the fees set forth in Section 27-25-4.7.

(c) A business entity applying for a title insurance agent license shall apply to the commissioner on the appropriate NAIC Uniform Business Entity Application and declare under penalty of suspension, revocation, or refusal of the license that the statements made in the application are true, correct, and complete to the best of the business entity’s knowledge and belief. Before approving the application, the commissioner shall find that the business entity meets all of the following :

(1) Is a domestic entity properly formed and existing under Title 10A and whose principal place of business is physically located in this state.

(2) Has designated an individual title insurance agent licensed in this state as responsible for the business entity’s compliance with this chapter and with the insurance laws, rules, and regulations of this state.

(3) Has not committed an act that is a ground for probation, suspension, revocation, or refusal of license as set forth in Section 27-25-4.5.

(4) Has paid the fees set forth in Section 27-25-4.7.

(d) The commissioner may require any documents reasonably necessary to verify the information contained in the application.
Ala. Code § 27-2B-1 — Alabama Code / Title 27 / Chapter 2B / Section 27-2B-1
Section 27-2B-1 Short Title
Status: in_force

This chapter shall be known as the Alabama Risk-Based Capital (RBC) for Insurers Act.
Ala. Code § 27-31D-5 — Alabama Code / Title 27 / Chapter 31D / Section 27-31D-5
Section 27-31D-5 Rules and Regulations
Status: in_force

The Department of Insurance shall promulgate such rules as are necessary to implement and administer this chapter.