Title 27 — Title 27

An insurer may invest in the stocks of other solvent insurers formed under the laws of the United States or any state thereof, provided that the total amount of the insurer’s investments in excess of the net asset value of the stock acquired shall not at any time exceed the great…

Notes, Etc., Secured by Leases, Agreements, Etc., Relating to Manufacturing, Mining, Etc., Machinery, Etc. (a) An insurer may invest in equipment trust obligations or certificates which are adequately secured evidencing an interest in transportation equipment wholly or in part wi…

As used in this chapter, the following terms shall have the respective meanings herein set forth, unless the context shall otherwise require: (1) ALABAMA INSURANCE CODE. Title 27 of this code. (2) INSURER. The term shall have the meaning ascribed in Section 27-1-2 and shall inclu…

Obligations of Railroads and Other Common Carriers. An insurer may invest in: (1) Leased line obligations of railroads where all of the fixed interest-bearing obligations of the lessee meet the standards prescribed in Section 27-41-15. (2) Terminal obligations of railroads and ot…

Societies. An insurer may invest in secured and unsecured obligations of religious institutions or societies located within the United States if the institution or society has not defaulted in payment of principal or interest on any of its obligations during the five years preced…

Gas, or Condensate Properties, Etc. An insurer may invest in adequately secured loans secured by first liens on interests in oil, gas, or condensate properties or leaseholds in the United States and Canada on which there are fully completed commercially producing wells. History: …

Receivers of Institutions Being Administered Under Court Direction. An insurer may invest in certificates, notes, or other obligations issued by trustees or receivers of any institution created or existing under the laws of the United States or of any state thereof which, or the …

Pledges or Assignments of Life Insurance Policies. An insurer may invest in loans with a maturity not in excess of five years from the date thereof which are secured by pledge of securities eligible for investment under this chapter or by the pledge or assignment of life insuranc…

A life insurer may lend to its policyholder upon the security of the policy any sum not exceeding the cash surrender value of the policy or may lend against pledge or assignment of any of its supplementary contracts or other contracts or obligations so long as the loan is adequat…

Loan Associations. An insurer may invest in shares or savings accounts of savings and loan associations insured by the Federal Savings and Loan Insurance Corporation. History: (Acts 1977, No. 408, p. 530, §26.)

(a) An insurer may invest in securities or other investments (1) issued in, (2) located in, (3) denominated in the currency of, (4) whose ultimate payment amounts of principal or interest are subject to fluctuations in the currency of, or (5) whose obligors are domiciled in count…

States Under Federal Law or Secured by Mortgages on Ships, Barges, Etc. An insurer may invest in bonds, debentures, notes, or other evidences of indebtedness which are: (1) Guaranteed by the United States of America, represented by the Secretary of Commerce acting pursuant to Tit…

of Trust on Real Property, Etc., Generally. An insurer may invest in: (1) Bonds, notes, or other evidences of indebtedness which are secured by a first mortgage lien or deed of trust upon unencumbered improved real property located in the United States or Canada, including leaseh…

Investments and Obligations for Investments Deemed Eligible Investments Under Chapter Generally; Filing with Commissioner of Certified Statements as to Investments or Obligations for Investments Not Deemed Eligible Under Chapter; Assets or Funds to Which Investment Limitations Ba…

Leases on Real Property. An insurer may invest in loans, notes, bonds, or other evidences of indebtedness of any person up to the fair value of real property securing said indebtedness, upon compliance with the following conditions and provisions: (1) The indebtedness must be sec…

An insurer may invest in electronic and mechanical machines constituting a data processing and accounting system if the cost of such system is not less than $10,000.00 and cost for such machines is amortized in full over a period not to exceed 10 calendar years. History: (Acts 19…

Securing Evidences of Indebtedness Held by Insurers and Subject to Mortgage Foreclosure or Insolvency Proceedings. (a) If real property securing any evidence of indebtedness held by an insurer is used for agricultural purposes and a proceeding to foreclose the mortgage or an inso…

Mortgages. In connection with mortgage loans made under subdivisions (2) and (3) of Section 27-41-29, an insurer may loan on the value of personal property items listed in the Department of Housing and Urban Development Commitment for Insurance or the Veterans Administration Cert…

(a)(1) An insurer may acquire, invest in, own, maintain, alter, furnish, and improve the following real estate: a. Land and buildings used for home office and branch office purposes, together with such other real estate as is required for the convenient transaction of its busines…

Facilities. (a) An insurer may invest in properties and facilities, and any interest and rights in such properties and facilities, for the development and production of fossil or synthetic fuel or other minerals, whether or not the extraction would deplete the surface of such pro…

(a) An insurer may make investments not otherwise expressly permitted by this chapter which may be counted as admitted assets, except as expressly prohibited under Section 27-41-36, provided that: (1) The aggregate of all such investments shall not exceed 10 percent of the insure…

Property. (a) After January 1, 1978, an insurer shall not invest in nor lend its funds upon the security of any note or other evidence of indebtedness of any director, officer, or controlling stockholder of the insurer, except as to policy loans authorized under Section 27-41-25 …

(a) The funds of a mutual aid association shall be in cash or shall be invested as provided in Sections 27-41-3 through 27-41-36 and Section 27-41-38 as applicable to life insurers, except that: (1) Funds of the association to the extent of its reserve liabilities resulting from …

and Funeral Equipment. In addition to other investments permitted under this chapter, mutual aid associations may invest in funeral supply inventories, consisting of caskets, suits, robes, dresses, and embalming supplies, and funeral equipment, consisting of automobiles, hearses,…

(a) The investments of a foreign or alien insurer shall be as permitted by the laws of its domicile, but shall be of a quality and diversity substantially equivalent to that required of like domestic insurers under this chapter. (b)(1) Cash equivalents are exempt from the limitat…

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…

Securities, Etc., Within Prescribed Period of Time. 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 ext…

of Investments Partially Qualifying as Eligible Investments. 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 insu…

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. History: (Acts 1977, No. 408, p. 530, §8.)

Municipalities, School Districts, Etc., Therein Generally. 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 an…

This chapter shall be known and may be cited as the “Alabama Insurance Guaranty Association Act.” History: (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. History: (Acts 1980, No. 80-80…

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. History: (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…

Preferred Creditor Status. 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…

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…

Plan to Disburse Assets; Notice of Application. (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 …

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. History: (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…