Title 27

No investment (other than in common stocks allowed under Section 27-41-17, in insurance stocks allowed under Section 27-41-18, in loans or investments allowed under Section 27-41-35, in real property allowed under Section 27-41-34, or in funeral supply inventories and equipment a…

Any real estate, personal property, securities, or other investment lawfully acquired and held by an insurer shall not be allowed as an admitted asset of the insurer after expiration of the period for disposal thereof or any extension of such period granted by the commissioner pu…

Except as expressly prohibited in Section 27-41-36, an insurer may make any investment without limit as to kind, time, or amount, but only eligible investments shall be included or counted as admitted assets of the insurer in the determination of its financial condition. If part …

An insurer shall not make any investment or loan exceeding 10 percent of the admitted assets of the insurer, other than loans on policies or annuity contracts, unless authorized, approved, or ratified by the board of directors of the insurer or by the committee or person as the b…

(a) An insurer shall not have at any one time any single investment or combination of investments in or loans upon the security of the obligations, property, or securities of any one person aggregating in cost to the insurer in excess of the greater of 10 percent of such insurer’…

An insurer may invest in bonds, notes, warrants, debentures, and other evidences of indebtedness which are direct obligations of the United States of America for which the full faith and credit of the United States of America is pledged for the payment of principal and interest. …

An insurer may invest in loans guaranteed as to principal and interest by the United States of America or by any agency or instrumentality of the United States of America to the extent of such guaranty. (Acts 1977, No. 408, p. 530, §8.)

An insurer may invest in bonds or other evidences of indebtedness which are general obligations of or are adequately secured as to both principal and interest by irrevocable pledge of specific revenues by this state or any other state of the United States or any county, incorpora…

This chapter shall be known and may be cited as the “Alabama Insurance Guaranty Association Act.” (Acts 1980, No. 80-806, p. 1639, §1.)

(a) The commissioner shall: (1) Notify the association of the existence of an insolvent insurer not later than three days after he receives notice of determination of the insolvency. The association shall be entitled to a copy of any complaint seeking an order of liquidation with…

(a) Any person recovering under this chapter shall be deemed to have assigned his or her rights under the policy to the association to the extent of his or her recovery from the association. Every insured or claimant seeking the protection of this chapter shall cooperate with the…

(a) Any person having a claim under an insurance policy, whether or not it is a policy issued by a member insurer, where the claim under the other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the association, shall be required fir…

(a) To aid in the detection and prevention of insurer insolvencies, it shall be the duty of the board of directors, upon majority vote, to notify the commissioner of any information indicating any member insurer may be insolvent or in a financial condition hazardous to the policy…

The association shall be subject to examination and regulation by the commissioner. The board of directors shall submit, not later than March 30 of each year, a financial report for the preceding calendar year in a form approved by the commissioner. (Acts 1980, No. 80-806, p. 163…

The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions except taxes levied on real or personal property. (Acts 1980, No. 80-806, p. 1639, §15.)

(a) A member insurer may offset against its premium tax liability to this state an assessment described in subdivision (3) of subsection (a) of Section 27-42-8 to the extent of 20 percent of the amount of such assessment for each of the five calendar years following the year in w…

There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the association or its agents or employees, the board of directors or the commissioner or his representatives for any action taken by them in the performance of…

All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this state shall be stayed for up to six months and such additional time thereafter as may be determined by the court from the date the insolvency is determined or an ancil…

Upon the issuance of a proper court order placing a domestic insurer in receivership or placing a foreign insurer in ancillary receivership for rehabilitation or liquidation, all policyholders, beneficiaries, and insureds of such insolvent insurer, with respect to claims arising …

The purpose of this chapter is to provide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay in payments and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detec…

(a) Within 120 days of a final determination of insolvency of an insurance company by a court of competent jurisdiction the receiver shall make application to the said court for approval of a proposal to disburse assets out of such company’s marshalled assets, from time to time a…

This chapter shall apply to all kinds of direct insurance, excluding all of the following: (1) Life, annuity, health, or disability insurance. (2) Mortgage guaranty, financial guaranty, or other forms of insurance offering protection against investment risks. (3) Fidelity or sure…

This chapter shall be liberally construed to effect the purpose under Section 27-42-2 which will constitute an aid and guide to interpretation. (Acts 1980, No. 80-806, p. 1639, §4.)

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise: (1) ACCOUNT. Any one of the three accounts created by Section 27-42-6. (2) AFFILIATE. A person who directly, or indirectly, through one or…

There is created a nonprofit unincorporated legal entity to be known as the Alabama Insurance Guaranty Association. All insurers defined as member insurers in subdivision (6) of Section 27-42-5 shall be and remain members of the association as a condition of their authority to tr…

(a) The board of directors of the association shall consist of not less than five nor more than nine persons serving terms as established in the plan of operation. The members of the board shall be selected by member insurers subject to the approval of the commissioner. Vacancies…

(a) The association shall: (1)a. Be obligated to pay covered claims existing prior to the order of liquidation arising within 30 days after the order of liquidation, or before the policy expiration date if less than 30 days after the order of liquidation, or before the insured re…

(a) Notwithstanding the one percent maximum assessment set forth in subdivision (3) of subsection (a) of Section 27-42-8, no member insurer may be assessed in any one year for the workers’ compensation account an amount greater than two percent of that member insurer’s net direct…

(a) 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 …

This chapter shall be known and may be cited as the “Legal Expense Insurance Act.” (Acts 1981, No. 81-719, p. 1214, §1.)

(a) Legal expense insurance may be written as individual, group, blanket, or franchise insurance. Each contractual obligation for legal expense insurance must be evidenced by a policy. Each person insured under a group policy must be issued a certificate of coverage. (b) No polic…

(a) No policy of legal expense insurance may be issued in this state unless the premium rates for the insurance have been filed with and approved by the commissioner. (b) Premium rates must be established and justified in accordance with generally accepted insurance principles, i…

(a) Contracts made between the insurer and participating attorneys, management contracts and contracts with other providers of services by the legal expense insurance policy must be filed with and approved by the commissioner. (b) Insurers must annually report to the commissioner…

(a) A legal service insurance corporation will pay the prescribed fees and taxes required of a domestic casualty insurer. (b) The following provisions of the insurance laws of this state apply to legal service insurance corporations authorized under Section 27-43-8, to the extent…

Persons representing or aiding a legal service insurance corporation in the solicitation of legal expense insurance contracts in this state and the legal service insurance corporation with respect thereto shall be subject to Chapters 7 and 8A of this title, except that legal serv…

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. (Acts 1981, No. 81-719, p. 1214, §1.)

All moneys received from licenses and fees shall be deposited to the credit of the Examiners’ Revolving Fund of the Department of Insurance. (Acts 1981, No. 81-719, p. 1214, §1.)

The commissioner shall devise and promulgate rules and regulations, not inconsistent with the provisions of this chapter, as he deems advisable for effectuating its orderly administration. (Acts 1981, No. 81-719, p. 1214, §1.)

Nothing contained in this chapter shall be construed to regulate the practice of law or limit the powers or authority of the Supreme Court of Alabama or State Bar of Alabama in the regulation of the conduct of attorneys. (Acts 1981, No. 81-719, p. 1214, §1.)

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context requires otherwise: (1) DEPARTMENT. The Department of Insurance; (2) COMMISSIONER. The Commissioner of Insurance of this state; (3) INSURER. Any person authorized to d…

The insurance laws of this state, including this chapter, do not apply to: (1) Retainer contracts made by attorneys-at-law with individual clients with fees based on estimates of the nature and amount of services to be provided to the specific client and similar contracts made wi…

(a) No person or organization may do a prepaid legal expense insurance business in this state unless authorized to do so by the commissioner. (b) This section does not apply to organizations exempt pursuant to Section 27-43-4. (Acts 1981, No. 81-719, p. 1214, §1.)

(a) Any domestic, foreign, or alien insurer authorized to transact casualty insurance or life, accident and sickness insurance in this state may transact legal expense insurance in this state. (b) Legal service insurance corporations possessing a valid certificate of authority ma…

(a) Any number of corporate or adult natural persons may organize a legal service insurance corporation under this section. (b) The articles of incorporation shall conform to the requirements applicable to corporations, except that: (1) The name of the corporation shall indicate …

(a) The incorporators shall file with the commissioner an application for a certificate of authority to do business upon a form to be furnished by the department, which shall include or have attached the following: (1) The names and, for the preceding 10 years, all addresses and …

(a) To assure the faithful performance of its obligations in the event of insolvency, each corporation authorized under Section 27-43-8 shall, through the commissioner, deposit and maintain with the Treasurer of the State securities of the type eligible for deposit by insurers un…