reglab/statecodes huggingface dataset:
2023 Code of Alabama › Title 27 - Insurance. › Chapter 5B - Reinsurance. › Section 27-5B-14 - Asset or Reduction From Liability for Reinsurance Ceded by a Domestic Insurer to an Assuming Insurer Not Meeting the Requirements of Sections 27-5b-3 Through 27-5b-13.

Section 27-5B-14
Asset or reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Sections 27-5B-3 through 27-5B-13.
(a) An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Section 27-5B-3, 27-5B-4, 27-5B-5, 27-5B-6, 27-5B-7, 27-5B-8, 27-5B-8.1, 27-5B-9, 27-5B-10, 27-5B-11, 27-5B-12, or 27-5B-13 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer.
(b) In addition to any other authority of the commissioner, the commissioner, by rule adopted pursuant to subsection (b) of Section 27-5B-19, may adopt specific additional requirements relating to any of the following:
(1) The valuation of assets or reserve credits.
(2) The amount and forms of security supporting reinsurance arrangements described in subsection (b) of Section 27-5B-19.
(3) The circumstances pursuant to which credit will be reduced or eliminated.
(c) The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or, in the case of a trust, held in a qualified U.S. financial institution, as defined in subsection (b) of Section 27-5B-15. This security may be in the form of any of the following:
(1) Cash.
(2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets.
(3) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified U.S. financial institution, as defined in subsection (a) of Section 27-5B-15, effective no later than December 31 of the year for which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement.
(4) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance (or confirmation) shall, notwithstanding the issuing (or confirming) institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs.
(5) Any other form of security acceptable to the commissioner.
(Act 2013-209, p. 463, §1; Act 2021-235, §1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 5B - Reinsurance. › Section 27-5B-15 - Qualified u.s. Financial Institutions.

Section 27-5B-15
Qualified U.S. financial institutions.
(a) For purposes of subdivision (3) of Section 27-5B-14, a qualified U.S. financial institution means an institution that meets all of the following:
(1) Is organized or, in the case of a U.S. office of a foreign banking organization, licensed, under the laws of the United States or any state thereof.
(2) Is regulated, supervised, and examined by U.S. federal or state authorities having regulatory authority over banks and trust companies.
(3) Has been determined by either the commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner.
(b) A qualified U.S. financial institution means, for purposes of those provisions of this law specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that meets both of the following:
(1) Is organized, or, in the case of a U.S. branch or agency office of a foreign banking organization, licensed, under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers.
(2) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies.
(Act 2013-209, p. 463, §1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 5B - Reinsurance. › Section 27-5B-16 - Insolvency Clause.

Section 27-5B-16
Insolvency clause.
Except as provided in Section 27-5B-17, no credit shall be allowed, as an admitted asset or deduction from liability, to any ceding insurer for reinsurance placed with a reinsurer qualified under this chapter, unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable under a contract reinsured by the assuming insurer on the basis of reported claims allowed by the liquidation court, without diminution because of the insolvency of the ceding insurer. The payments shall be made directly to the ceding insurer or to its domiciliary liquidator except in either of the following instances:
(1) Where the contract or other written agreement specifically provides another payee of the reinsurance in the event of the insolvency of the ceding insurer.
(2) Where the assuming insurer, with the consent of the direct insured, has assumed the policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under the policies and in substitution for the obligations of the ceding insurer to the payees.
(Act 2013-209, p. 463, §1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 5B - Reinsurance. › Section 27-5B-17 - Guaranty Association Election.

Section 27-5B-17
Guaranty association election.
Notwithstanding Section 27-5B-16, in the event that a life and health insurance guaranty association has made the election to succeed to the rights and obligations of the insolvent insurer under the contract of reinsurance, the reinsurer's liability to pay covered reinsured claims shall continue under the contract of reinsurance subject to the payment to the reinsurer of the reinsurance premiums for the coverage. Payment for the reinsured claims shall only be made by the reinsurer pursuant to the direction of the guaranty association or its designated successor. Any payment made at the direction of the guaranty association or its designated successor by the reinsurer shall discharge the reinsurer of all further liability to any other party for the claim payment.
(Act 2013-209, p. 463, §1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 5B - Reinsurance. › Section 27-5B-18 - Notice by Domiciliary Liquidator.

Section 27-5B-18
Notice by domiciliary liquidator.
The reinsurance agreement may provide that the domiciliary liquidator of an insolvent ceding insurer shall give written notice to the assuming insurer of the pendency of a claim against the ceding insurer on the contract within a reasonable time after the claim is filed in the liquidation proceeding. During the pendency of the claim, any assuming insurer may investigate the claim and interpose, at its own expense, in the proceeding where the claim is to be adjudicated any defenses which it deems available to the ceding insurer, or its liquidator. The expense may be filed as a claim against the insolvent ceding insurer to the extent of a proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer. Where two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose a defense to the claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though the expense had been incurred by the ceding insurer.
(Act 2013-209, p. 463, §1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 5B - Reinsurance. › Section 27-5B-19 - Rulemaking Authority.

Section 27-5B-19
Rulemaking authority.
(a) The commissioner may adopt rules implementing this chapter.
(b) In addition to the authority of the commissioner pursuant to subsection (a), the commissioner may adopt rules applicable to reinsurance arrangements as provided in this subsection.
(1) A rule adopted pursuant to this subsection may apply only to reinsurance relating to any of the following:
a. Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits.
b. Universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period.
c. Variable annuities with guaranteed death or living benefits.
d. Long-term care insurance policies.
e. Any other life and health insurance and annuity product for which the NAIC adopts model regulatory requirements with respect to credit for reinsurance.
(2) A rule adopted pursuant to paragraph a. or b. of subdivision (1) may apply to any reinsurance agreement containing any of the following:
a. Policies issued on or after January 1, 2015.
b. Policies issued prior to January 1, 2015, if risk pertaining to the pre-2015 policies is ceded in connection with the reinsurance agreement, in whole or in part, on or after January 1, 2015.
c. Reinsurance agreements meeting both items a. and b.
(3) A rule adopted pursuant to this subsection may require the ceding insurer, in calculating the amounts or forms of security required to be held under rules adopted under this authority, to use the valuation manual adopted by the NAIC as described in subdivision (b)(1) of Section 27-36A-15, including all amendments adopted by the NAIC and in effect on the date as of which the calculation is made, to the extent applicable.
(4) A rule adopted pursuant to this subsection does not apply to cessions to an assuming insurer that meets any of the following:
a. The conditions set forth in Section 27-5B-8.1.
b. Is certified in this state.
c. Maintains at least two hundred fifty million dollars ($250,000,000) in capital and surplus when determined in accordance with the Accounting Practices and Procedures Manual of the NAIC, including all amendments thereto adopted by the NAIC, excluding the impact of any permitted or prescribed practices, and is either of the following:
1. Licensed in at least 26 states.
2. Licensed in at least 10 states, and licensed or accredited in a total of at least 35 states.
(5) The authority to adopt rules pursuant to this subsection does not limit the commissioner’s general authority to adopt rules pursuant to subsection (a).
(Act 2013-209, p. 463, §1; Act 2021-235, §1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 5B - Reinsurance. › Section 27-5B-20 - Reinsurance Agreements Affected.

Section 27-5B-20
Reinsurance agreements affected.
The amendments of this chapter and the additions to this chapter by Act 2021-235 shall apply to all cessions after January 1, 2022, under reinsurance agreements that have an inception, anniversary, or renewal date on or after July 1, 2022.
(Act 2021-235, §2.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-1 - Deposits of Insurers - Authorized Deposits.

Section 27-6-1
Deposits of insurers - Authorized deposits.
The following deposits of insurers, when made through the commissioner, shall be accepted and held and shall be subject to the provisions of this chapter:
(1) Deposits required under this title for authority to transact insurance in this state;
(2) Deposits of domestic insurers when made pursuant to the laws of other states, provinces, and countries as requirement for authority to transact insurance in such state, province, or country;
(3) Deposits of reserves made by domestic life insurers under laws heretofore in force; and
(4) Deposits in such additional amounts as are permitted to be made under Section 27-6-11.
(Acts 1971, No. 407, p. 707, §97.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-2 - Deposits of Insurers - Purposes for Which Held.

Section 27-6-2
Deposits of insurers - Purposes for which held.
Such deposits shall be held for purposes as follows:
(1) Deposits made in this state under Sections 27-3-11, 27-3-12, and 27-3-14 of this title shall be held for the purposes stated in the respective sections;
(2) A deposit made in this state by a domestic insurer transacting insurance in another state, province or country and as required by the laws of such state, province, or country shall be held for the protection of the insurer's policyholders or policyholders and creditors;
(3) Deposits of reserves made by domestic life insurers under laws heretofore in force shall be held for the purpose or purposes specified in such laws or in the policies or contracts by which such deposit was required or declared; and
(4) Deposits required pursuant to the retaliatory provision, Section 27-3-29, shall be held for such purposes as are required by such laws and as specified by the commissioner's order by which the deposit is required.
(Acts 1971, No. 407, p. 707, §98.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-4 - Deposits of Insurers - State Treasurer as Custodian.

Section 27-6-4
Deposits of insurers - State Treasurer as custodian.
(a) Deposits made in this state under Sections 27-3-11, 27-3-12, and 27-3-14, together with deposit of reserves of domestic life insurers under registered policies heretofore issued, shall be made through the commissioner with the Treasurer of the State of Alabama.
(b) The State Treasurer, in his official capacity, shall take receipt for and hold deposits made under this title as provided in subsection (a) of this section, subject to the provisions of this chapter.
(c) The State Treasurer shall hold all such deposits in safekeeping in the vaults located in his offices or, if space in such vaults is not reasonably adequate and safe for all securities and property otherwise to be contained therein, the Treasurer may keep such securities in safe deposit boxes rented by him for the purpose and under his control in established safe deposit institutions located in the City of Montgomery, Alabama.
(d) The Treasurer shall be the custodian only of such deposits and shall have no powers or responsibility as to the character or amount thereof. He shall accept, permit substitutions, and release securities or assets so deposited only upon written authorization of the commissioner and the insurer or upon order of the court and shall have no obligation to determine in any instance whether such authorization or order, if genuine, is otherwise lawful or proper.
(e) For all securities and assets deposited as provided in this section, the faith and credit of the State of Alabama is pledged that the same will be returned to the parties entitled to receive them or disposed of as provided in this chapter.
(Code 1940, T. 28, §73; Acts 1971, No. 407, p. 707, §100.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-5 - Deposits of Insurers - Record of Securities and Assets.

Section 27-6-5
Deposits of insurers - Record of securities and assets.
The commissioner shall keep a record of the securities and assets comprising each deposit, showing by item the amount and market value and of all his transactions relative thereto.
(Acts 1971, No. 407, p. 707, §101.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-6 - Securities and Assets - Assignment and Reassignment, etc.; Appraisal or Valuation.

Section 27-6-6
Securities and assets - Assignment and reassignment, etc.; appraisal or valuation.
(a) All securities not negotiable by delivery and deposited by an insurer shall be duly assigned to the commissioner and his successors in office. All other assets so deposited shall be duly transferred or conveyed to the commissioner. Upon release of any such security or asset to the insurer, the commissioner shall reassign, or transfer or reconvey the same to the insurer.
(b) The commissioner may, in his discretion, prior to acceptance for deposit of any security or asset or at any time thereafter while so deposited, have the same appraised or valued by competent appraisers. The reasonable costs of any such appraisal or valuation shall be borne by the insurer.
(Acts 1971, No. 407, p. 707, §102.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-7 - Securities and Assets - Power of Attorney to Sell, Etc.

Section 27-6-7
Securities and assets - Power of attorney to sell, etc.
In lieu of the assignment, transfer, or conveyance of securities and assets to the commissioner as provided for in subsection (a) of Section 27-6-6 and at all events in connection with any deposit heretofore or hereafter made through the commissioner, the commissioner may require or permit the depositing insurer to deliver to him a power of attorney, executed by the lawful owner of such securities or assets, authorizing the commissioner to transfer, sell, or exchange the same for the purposes of the law under which the same are deposited or held on deposit. The power of attorney shall specifically describe each of the securities and assets covered thereby and shall not be a general power of attorney covering all securities and assets on deposit or thereafter deposited.
(Acts 1953, No. 727, p. 981, §1; Acts 1971, No. 407, p. 707, §103.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-8 - Securities and Assets - Authority to Sell; Exception.

Section 27-6-8
Securities and assets - Authority to sell; exception.
The commissioner shall exercise the power granted by the power of attorney provided for in Section 27-6-7 or otherwise sell any security or asset under any assignment, transfer or conveyance pursuant to Section 27-6-6, only pursuant to, and in accordance with, an order of a court of competent jurisdiction in a proper proceeding or action to which the insurer owning such securities or assets is a party. This section shall not apply as to the special deposits of surety insurers which are subject to Section 27-6-13.
(Acts 1953, No. 727, p. 981, §2; Acts 1971, No. 407, p. 707, §104.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-9 - Power of Attorney - Safekeeping; Return.

Section 27-6-9
Power of attorney - Safekeeping; return.
The power of attorney provided for in Section 27-6-7 shall be kept by the commissioner in a place of safekeeping and may be physically attached to the securities or assets described therein. Whenever such securities or assets, or any portion thereof, are returned to the insurer which deposited them, the power of attorney shall be returned to the insurer or to the trustee or other representative authorized for that purpose.
(Acts 1953, No. 727, p. 981, §3; Acts 1971, No. 407, p. 707, §105.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-10 - Power of Attorney - New Power of Attorney.

Section 27-6-10
Power of attorney - New power of attorney.
If less than all of the securities or assets covered by any such power of attorney is returned to the insurer or its trustee or agent, the commissioner may require the insurer to deliver to him, as a condition precedent to the return of such power of attorney, a new power of attorney covering the securities and assets not then being withdrawn. The new power of attorney shall be held and exercised under the same restrictions and upon the same conditions as prescribed in this chapter for the original power of attorney.
(Acts 1953, No. 727, p. 981, §4; Acts 1971, No. 407, p. 707, §106.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-11 - Excess Deposits.

Section 27-6-11
Excess deposits.
An insurer may so deposit assets or securities in an amount exceeding its deposit required or otherwise permitted under this title by not more than 20 percent of such required or permitted deposit or $100,000.00, whichever is the larger amount, for the purpose of absorbing fluctuations in the value of securities and assets deposited and to facilitate the exchange and substitution of such securities and assets. During the solvency of the insurer, any such excess shall be released to the insurer upon its request. During the insolvency of the insurer, such excess deposit shall be released only as provided in subdivision (b) (3) of Section 27-6-15.
(Acts 1971, No. 407, p. 707, §107.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-12 - Rights of Solvent Insurers.

Section 27-6-12
Rights of solvent insurers.
So long as the insurer remains solvent and is in compliance with this title, it may:
(1) Demand, receive, maintain actions for, and recover the income from the securities or assets deposited;
(2) Exchange and substitute for the deposited securities or assets, or any part thereof, other eligible securities and assets of equivalent or greater value; and
(3) At any reasonable time, inspect any such deposit.
(Code 1940, T. 28, §73; Acts 1971, No. 407, p. 707, §108.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-13 - Sale of Surety Insurers' Special Deposit to Pay Outstanding Judgment.

Section 27-6-13
Sale of surety insurers' special deposit to pay outstanding judgment.
(a) If any surety insurer which has made the deposit provided for in Section 27-3-12 fails or refuses to pay any final judgment entered against it upon any bond or undertaking from which no appeal and supersedeas has been taken for 30 days after the entry of such judgment, the clerk or register of the court in which such judgment was entered shall certify a copy thereof to the commissioner, together with the fact that it remains unpaid, and the commissioner shall sell as many of the securities or other assets deposited by such insurer as may be necessary to pay such judgment, and the interest and costs thereon, and to pay to the clerk or register of the court, from the proceeds of the sale, the amount of the judgment, with interest and costs. The commissioner shall sell such securities or other assets at private or public sale, with or without notice, or so many as may be necessary for the best price he can obtain in the market, shall assign the same to the purchaser and shall apply the proceeds, or so much thereof as may be necessary, to the payment of such judgment, with interest and costs, the surplus, if any, remaining on deposit in lieu of the securities or other assets so sold.
(b) Of such sale, the commissioner must forthwith notify the insurer and require it to supply the deficiency, if any, in the deposit within 30 days as required in Section 27-6-14; and, if the insurer fails to do so, the commissioner shall revoke its certificate of authority.
(Acts 1909, No. 147, p. 329; Acts 1971, No. 407, p. 707, §109.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-14 - Curing of Deficiency in Market Value of Deposit.

Section 27-6-14
Curing of deficiency in market value of deposit.
(a) If for any reason the market value of assets and securities of an insurer held on deposit in this state under this title falls below the amount so required, the insurer shall promptly deposit other or additional assets or securities eligible for deposit sufficient to cure such deficiency. If the insurer has failed to cure the deficiency within 30 days after receipt of notice thereof by registered or certified mail from the commissioner, the commissioner shall revoke the insurer's certificate of authority.
(b) If for any reason the market value of assets and securities of a domestic life insurer, representing deposit of the reserves of certain of its outstanding registered policies and registered annuity contracts under laws heretofore in force, falls below the amount so required and as determined from the insurer's most recent annual statement or most recent examination of the insurer by the commissioner, the insurer shall promptly deposit other or additional assets or securities eligible for deposit sufficient to cure such deficiency. If the insurer has failed to cure the deficiency, after the commissioner has given the insurer notice thereof by registered or certified mail, within such reasonable time not exceeding 90 days as may be allowed therefor by the commissioner and so specified in his notice, the insurer shall be deemed to be insolvent and the commissioner shall revoke its certificate of authority and institute delinquency proceedings against the insurer under Chapter 31 of this title.
(Acts 1971, No. 407, p. 707, §110.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-15 - Release of Deposit - Generally.

Section 27-6-15
Release of deposit - Generally.
(a) All deposits in this state made under this title shall be held on deposit as long as there is outstanding any liability of the insurer with respect to which the deposit was made.
(b) Any such deposit shall be released and returned:
(1) To the insurer upon extinguishment by reinsurance in an insurer authorized to transact such insurance in this state, or otherwise, of all liability of the insurer for the security of which the deposit is held;
(2) To the insurer during solvency, to the extent such deposit is in excess of the amount required; or
(3) Upon proper order of a court of competent jurisdiction, to the receiver, conservator, rehabilitator, or liquidator of the insurer or to any other properly designated official, or officials, who succeed to the management and control of the insurer's assets.
(c) The Treasurer shall release any such deposit, or part thereof, upon written authorization of the commissioner and of the insurer or order of court, as provided in subsection (d) of Section 27-6-4.
(d) In the case of deposits of title insurers made under Section 27-3-13, the deposit or excess portion thereof shall be released by the trustee bank or trust company upon written authorization of the commissioner or upon order of a court of competent jurisdiction. If a foreign title insurer which has made such a deposit reincorporates under the laws of the State of Alabama and qualifies under this code as a domestic title insurer and if all of the liabilities of such foreign insurer in this state are assumed by such new domestic insurer and the foreign insurer does not thereafter transact business in this state, its deposit shall be delivered by such trustee to such new domestic insurer upon its application and the written authorization of the commissioner.
(e) This section shall not apply as to deposits held with respect to registered life insurance policies or registered annuity contracts insured under laws heretofore in force. Such deposits shall be released only as provided under the laws pursuant to which such policies and contracts were so issued and registered.
(Acts 1971, No. 407, p. 707, §111.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6 - Administration of Deposits. › Section 27-6-16 - Release of Deposit - Filing of Statement; Authorization of Release.

Section 27-6-16
Release of deposit - Filing of statement; authorization of release.
(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.
(Acts 1971, No. 407, p. 707, §112.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6A - Managing General Agents. › Section 27-6A-1 - Short Title.

Section 27-6A-1
Short title.
Sections 27-6A-2 through 27-6A-8, inclusive, of this chapter may be cited as the "Alabama Managing General Agents Act."
(Acts 1993, No. 93-675, p. 1240, §9.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6A - Managing General Agents. › Section 27-6A-2 - Definitions.

Section 27-6A-2
Definitions.
As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:
(1) ACTUARY. A person who is a member in good standing of the American Academy of Actuaries.
(2) INSURER. A person defined in subdivisions (2) and (3) of Section 27-1-2.
(3) MANAGING GENERAL AGENT. Any person, firm, or association who does both of the following:
a. Manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office.
b. Acts as a producer for an insurer whether known as a managing general agent, manager, or other similar term, who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with one or more of the following activities related to the business produced:
1. Adjusts or pays claims in excess of an amount determined by the commissioner.
2. Negotiates reinsurance on behalf of the insurer.
c. Notwithstanding the above, the following persons shall not be considered as managing general agents for the purposes of this chapter:
1. An employee of the insurer.
2. A United States manager of the United States branch of an alien insurer.
3. An underwriting manager who, pursuant to contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, subject to the Alabama Insurance Holding Company System Regulatory Act, Chapter 29, commencing with Section 27-29-1, of this title, and whose compensation is not based on the volume of premiums written.
4. The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney.
(4) POLICYHOLDER SURPLUS. The excess of assets over liabilities.
(5) UNDERWRITE. The authority to accept or reject risk on behalf of the insurer.
(Acts 1993, No. 93-675, p. 1240, §3; Act 2001-702, p. 1509, §13.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6A - Managing General Agents. › Section 27-6A-3 - Licensure Requirements.

Section 27-6A-3
Licensure requirements.
(a) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located in this state for an insurer licensed in this state unless then licensed in this state as a managing general agent of the insurer.
(b) No person, firm, association, or corporation shall act in the capacity of a managing general agent representing an insurer domiciled in this state with respect to risks located outside this state unless then licensed in this state as a managing general agent of the insurer. Where applicable, the license may be a nonresident license pursuant to this chapter.
(c) The commissioner may require the managing general agent to maintain a bond in an amount acceptable to the commissioner for the protection of the insurer.
(d) The commissioner may require the managing general agent to maintain an errors and omissions policy.
(Acts 1993, No. 93-675, p. 1240, §4; Act 2001-702, p. 1509, §13.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6A - Managing General Agents. › Section 27-6A-5 - Duties of Insurer.

Section 27-6A-5
Duties of insurer.
Insurers shall have the following duties:
(1) The insurer shall have on file an independent financial examination, in a form acceptable to the commissioner, of each managing general agent with which it has done business.
(2) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. This is in addition to any other required loss reserve certification.
(3) The insurer shall periodically, and at least semi-annually, conduct an onsite review of the underwriting and claims processing operations of the managing general agent.
(4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicate shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent.
(5) Within 30 days of entering into or terminating a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the commissioner. Notices of appointment of a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the commissioner may request.
(6) An insurer shall review its books and records each quarter to determine if any producer has become, by operation of subdivision (3) of Section 27-6A-2, a managing general agent as defined in that section. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the commissioner of the determination and the insurer and the producer shall fully comply with the provisions of this chapter within 30 days of the notification.
(7) An insurer shall not appoint to its board of directors an officer, director, employee, subagent, or controlling shareholder of its managing general agents. This subsection shall not apply to relationships governed by the Alabama Insurance Holding Company System Regulatory Act, Chapter 29, commencing with Section 27-29-1, of this title.
(Acts 1993, No. 93-675, p. 1240, §6; Act 2001-702, p. 1509, §13.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6A - Managing General Agents. › Section 27-6A-6 - Acts of Managing General Agent.

Section 27-6A-6
Acts of managing general agent.
The acts of the managing general agent are considered to be the acts of the insurer on whose behalf it is acting. A managing general agent may be examined as if it were the insurer.
(Acts 1993, No. 93-675, p. 1240, §7.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6A - Managing General Agents. › Section 27-6A-7 - Penalties.

Section 27-6A-7
Penalties.
(a) If the commissioner finds after a hearing conducted in accordance with Section 27-2-28, that any person has violated this chapter, the commissioner may order:
(1) For each separate violation, a penalty in an amount of up to $5,000.
(2) Revocation or suspension of the managing general agent's license.
(3) The managing general agent to reimburse the insurer, the rehabilitator, or liquidator of the insurer for any losses incurred by the insurer caused by a violation of this chapter committed by the managing general agent.
(b) The decision, determination, or order of the commissioner pursuant to subsection (a) of this section shall be subject to judicial review pursuant to Section 27-2-31.
(c) No provision of this section shall affect the right of the commissioner to impose any other penalties provided for in the insurance law, rule, or regulation.
(d) No provision of this chapter is intended to or shall in any manner limit or restrict the rights of policyholders, claimants, and auditors.
(Acts 1993, No. 93-675, p. 1240, §8.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6A - Managing General Agents. › Section 27-6A-8 - Compliance.

Section 27-6A-8
Compliance.
No insurer may continue to use the services of a managing general agent after midnight December 31, 1993, unless the insurer is in compliance with this chapter.
(Acts 1993, No. 93-675, p. 1240, §9.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6B - Business Transacted With Producer Controlled Property and Casualty Insurer Law. › Section 27-6B-1 - Short Title.

Section 27-6B-1
Short title.
Sections 27-6B-2 to 27-6B-6, inclusive, of this chapter may be cited as the "Alabama Business Transacted With Producer Controlled Property and Casualty Insurer Law."
(Acts 1993, No. 93-675, p. 1240, §14.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6B - Business Transacted With Producer Controlled Property and Casualty Insurer Law. › Section 27-6B-2 - Definitions.

Section 27-6B-2
Definitions.
As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:
(1) ACCREDITED STATE. A state in which the Department of Insurance meets the minimum financial qualifications and regulatory standards promulgated and established, from time to time, by the National Association of Insurance Commissioners.
(2) COMMISSIONER. The Commissioner of Insurance.
(3) CONTROL or CONTROLLED. The same as defined in Section 27-29-1.
(4) CONTROLLED INSURER. A licensed insurer who is controlled, directly or indirectly, by a producer.
(5) CONTROLLING PRODUCER. A producer who, directly or indirectly, controls an insurer.
(6) LICENSED INSURER or INSURER. Any person, firm, association, or corporation duly licensed to transact a property and casualty insurance business in this state. For the purposes of this chapter, the following are not licensed insurers:
a. A residual market pool and a joint underwriting authority or association.
b. A captive insurer other than risk retention groups as defined in 15 U.S.C. Section 3901 et seq. and 42 U.S.C. Section 9671, which, for the purposes of this chapter, are insurers owned by another organization whose exclusive purpose is to insure risks of the parent organization and affiliated companies or, in the case of groups and associations, insurance organizations owned by the insureds whose exclusive purpose is to insure risks to member organizations and group members and their affiliates.
(7) PRODUCER. An insurance broker or brokers or any other person, firm, association, or corporation, when, for any compensation, commission, or other thing of value, the person, firm, association, or corporation acts or aids in any manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf of another insured person, firm, association, or corporation. The term is not intended to include an exclusive agent or any independent agent acting on behalf of the controlled insurer and any subagent or representative of the agent, who acts in the solicitation of, negotiation for, or procurement or making of an insurance contract, if the agent is not also acting in the capacity of an insurance broker in the transaction in question.
(Acts 1993, No. 93-675, p. 1240, §15; Act 2014-377, p. 1407, §4.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6B - Business Transacted With Producer Controlled Property and Casualty Insurer Law. › Section 27-6B-3 - Application of Chapter to Licensed Insurer.

Section 27-6B-3
Application of chapter to licensed insurer.
This chapter shall apply to any licensed insurer as defined in Section 27-6B-2, either domiciled in this state or domiciled in a state that is not an accredited state but having in effect a substantially similar law. The Alabama Insurance Holding Company System Regulatory Act, Chapter 29 (commencing with Section 27-29-1) of Title 27, to the extent it is not superseded by this chapter, shall continue to apply to all parties within holding company systems subject to this chapter.
(Acts 1993, No. 93-675, p. 1240, §16.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6B - Business Transacted With Producer Controlled Property and Casualty Insurer Law. › Section 27-6B-5 - Disclosure of Relationship Between Producer and Controlled Insurer.

Section 27-6B-5
Disclosure of relationship between producer and controlled insurer.
The producer, prior to the effective date of the policy, shall deliver written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer. Except that, if the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain records of a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured.
(Acts 1993, No. 93-675, p. 1240, §18.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 6B - Business Transacted With Producer Controlled Property and Casualty Insurer Law. › Section 27-6B-6 - Penalties.

Section 27-6B-6
Penalties.
(a) If the commissioner believes that the controlling producer or any other person has not materially complied with this chapter, or any regulation or order promulgated hereunder, after notice and opportunity to be heard, the commissioner may order the controlling producer to cease placing business with the controlled insurer.
(b) If it was found that because of the material non-compliance that the controlled insurer or any policyholder thereof has suffered any loss or damage, the commissioner may maintain a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of the insurer or policyholder, or other appropriate relief.
(c) If an order for liquidation or rehabilitation of the controlled insurer has been entered, pursuant to Chapter 32 of Title 27, and the receiver appointed under that order believes that the controlling producer or any other person has not substantially complied with this chapter, or any regulation or order promulgated under this chapter, and the insurer suffers any loss or damage because of the noncompliance, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions or remedies for the benefit of the insurer.
(d) Nothing contained in this section shall affect the right of the commissioner to impose any other penalties provided for in the insurance law.
(e) This chapter shall be construed to preserve the rights of policyholders, claimants, creditors, or other third parties.
(Acts 1993, No. 93-675, p. 1240, §19.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 7 - Property, Casualty and Surety Insurance Representatives. › Section 27-7-2 - Applicability of Chapter.

Section 27-7-2
Applicability of chapter.
(a) This chapter governs the qualifications and procedures for the licensing of insurance producers and service representatives. It simplifies and organizes some statutory language to improve efficiency, permits the use of new technology, and reduces costs associated with issuing and renewing insurance licenses.
(b) This chapter does not apply to surplus line brokers licensed pursuant to Section 27-10-24, except as provided in Section 27-7-28.
(c) This chapter does not apply to title insurance.
(Acts 1957, No. 530, p. 726, § 1; Acts 1971, No. 407, p. 707, § 113; Acts 1988, No. 88-123, p. 159, § 1; Act 2001-702, p. 1509, § 1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 7 - Property, Casualty and Surety Insurance Representatives. › Section 27-7-3 - Applicability of Provision on Insurance Vending Machines.

Section 27-7-3
Applicability of provision on insurance vending machines.
Repealed by Act 2001-702, p. 1509, §16, effective January 1, 2002.
(Acts 1971, No. 407, p. 707, §140; Acts 1988, No. 88-123, p. 159, §1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 7 - Property, Casualty and Surety Insurance Representatives. › Section 27-7-4 - Licenses - Requirement; Forms.

Section 27-7-4
Licenses - Requirement; forms.
(a) No person shall in this state sell, solicit, or negotiate insurance for any class or classes of insurance unless the person is then licensed for that line of authority in accordance with this chapter. Any insurer accepting business directly from a person not licensed for that line of authority and not appointed by the insurer shall be liable to a fine up to three times the premium received from the person.
(b) No producer shall act on behalf of any insurer for which an appointment is not held under this chapter. A producer who is not acting on behalf of an insurer is not required to become appointed. For purposes of this section, a producer who refers business to an appointed producer pursuant to Section 27-7-34 shall not be deemed to be acting on behalf of the insurer with whom the business is placed, regardless of whether commissions on this business are shared.
(c) The commissioner shall prescribe and furnish on request all forms required in connection with application for, issuance, continuation, or termination of licenses and appointments.
(Acts 1957, No. 530, p. 726, §3; Acts 1971, No. 407, p. 707, §119; Acts 1988, No. 88-123, p. 159, §1; Act 2001-702, p. 1509, §1.)
2023 Code of Alabama › Title 27 - Insurance. › Chapter 7 - Property, Casualty and Surety Insurance Representatives. › Section 27-7-4.1 - Licenses - Required to Receive Payment, Etc.

Section 27-7-4.1
Licenses - Required to receive payment, etc.
(a) No insurer or producer shall pay, directly or indirectly, any commission or other valuable consideration to any person for services as a producer or service representative within this state unless the person holds a currently valid license as a producer or service representative as to the kind or class of business involved as required by this chapter.
(b) Any insurer or producer violating this section shall be liable for a fine in an amount of up to three times the amount of the commission paid. The fine shall be levied and collected by the commissioner. Upon failure to pay the fine the commissioner may, in the commissioner's discretion, revoke the license of the producer or the insurer's certificate of authority.
(c) The provisions of this section shall not prevent any of the following:
(1) Payment of renewal or other deferred commissions to any person solely because the person has ceased to hold a license to act as a producer.
(2) Payment to the personal representative of a deceased producer.
(3) Payment to a person holding a temporary producer license.
(Act 2001-702, p. 1509, §2.)