Title 27 — Title 27

(a) No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding 10 percent of its surplus to policyholders. (b) A “subject of insurance,” for the purposes of this section, as to insurance …

Repealed by Act 2013-209, §2, effective January 1, 2014. History: (Acts 1971, No. 407, p. 707, §96; Acts 1990, No. 90-767, p. 1566; Acts 1994, 1st Ex. Sess., No. 94-788, p. 87, §1; Act 2003-346, p. 879, §1.)

Sickle-Cell Anemia Prohibited. Notwithstanding any other provision of law, any insurance company doing business within the state which offers health or disability insurance, is hereby prohibited from denying coverage to applicants because the applicant has been diagnosed as havin…

“Life insurance” is insurance on human lives. The transaction of life insurance includes also the granting of endowment benefits, additional benefits in event of death or dismemberment by accident or accidental means, additional benefits in event of the insured’s disability, buri…

For the purpose of this title, an “annuity” is a contract under which obligations are assumed with respect to periodic payments for a specific term, or terms, or where the making or continuance of all or of some of such payments or the amount of any such payment is dependent upon…

“Disability insurance” is insurance of human beings against bodily injury, disablement or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness and every insurance appertaining thereto. Disability insurance does n…

“Property insurance” is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and every hazard or cause and against loss consequential upon such loss or damage other than noncontr…

(a) “Casualty insurance” includes: (1) VEHICLE INSURANCE. Insurance against loss of, or damage to, any land vehicle or aircraft, or any draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom from any hazard or cau…

“Surety insurance” includes: (1) Fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust; (2) Insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds,…

“Marine insurance” includes: (1) Insurance against any and all kinds of loss or damage to: a. Vessels, craft, aircraft, cars, automobiles and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious s…

For the purposes of this title, “wet marine and transportation insurance” is that part of marine insurance which includes only: (1) Insurance upon vessels, crafts, hulls and of interests therein or with relation thereto; (2) Insurance of marine builder’s risks, marine war risks, …

This chapter may be cited as the Alabama Reinsurance Intermediary Act. History: (Acts 1993, No. 93-673, p. 1215, §1.)

(a) A reinsurance intermediary shall be subject to examination by the commissioner. The commissioner shall have access to all books, bank accounts, and records of the reinsurance intermediary in a form usable to the commissioner. (b) A reinsurance intermediary-manager may be exam…

(a) A reinsurance intermediary, insurer, or reinsurer found by the commissioner, after a hearing conducted in accordance with Section 27-2-28, to be in violation of this chapter, shall: (1) For each separate violation, pay a penalty in an amount not exceeding $5,000. (2) Be subje…

The commissioner may adopt reasonable rules and regulations for the implementation and administration of the provisions of this chapter. History: (Acts 1993, No. 93-673, p. 1215, §12.)

No insurer or reinsurer may continue to utilize the services of a reinsurance intermediary on and after May 17, 1993, unless utilization is in compliance with this chapter. History: (Acts 1993, No. 93-673, p. 1215, §15.)

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) COMMISSIONER. The Alabama Commissioner of…

(a) No person, firm, association, or corporation shall act as a reinsurance intermediary-broker in this state if the reinsurance intermediary-broker maintains an office either directly, or as a member or employee of a firm or association, or an officer, director, or employee of a…

Transactions between a reinsurance intermediary-broker and the insurer it represents in that capacity shall only be entered into pursuant to a written authorization, specifying the responsibilities of each party. The authorization shall, at a minimum, provide that: (1) The insure…

(a) For at least 10 years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-broker, the reinsurance intermediary-broker shall keep a complete record for each transaction showing all of the following: (1) The type of contract, limits, unde…

Broker. (a) An insurer shall not engage the services of any person, firm, association, or corporation to act as a reinsurance intermediary-broker on its behalf unless the person is licensed as required by subsection (a) of Section 27-5A-3. (b) An insurer may not employ an individ…

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 lea…

The reinsurance intermediary-manager shall not: (1) Cede retrocessions on behalf of the reinsurer, except that the reinsurance intermediary-manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsur…

Manager. (a) A reinsurer shall not engage the services of any person, firm, association, or corporation to act as a reinsurance intermediary-manager on its behalf unless such person is licensed as required by subsection (b) of Section 27-5A-3. (b) The reinsurer shall annually obt…

The purpose of this chapter is to protect the interest of insureds, claimants, ceding insurers, assuming insurers, and the public generally. The Legislature declares its intent is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom t…

Reinsurance Agreement Requirements. (a) If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the credit permitted by Sections 27-5B-6 and 27-5B-7 shall not be allowed unless the assuming insurer agrees in the reinsur…

Agreement Requirements. If the assuming insurer does not meet the requirements of Section 27-5B-4, 27-5B- 5, 27-5B-6, or 27-5B-8.1, the credit permitted by Section 27-5B-7 or 27-5B-8 shall not be allowed unless the assuming insurer agrees in the trust agreements to the following …

(a) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the commissioner may suspend or revoke the reinsurer’s accreditation or certification. (b) The commissioner must give the reinsurer notice and opportunity for hearing. …

(a) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the commissioner within 30 days after reinsurance recoverables from any single assuming insurer, or group of affiliated a…

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, 2…

(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…

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 ev…

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 claim…

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 li…

(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 …

(a) An insurer authorized under this title may accept reinsurance only of such risks and retain risk thereon within such limits as it is otherwise authorized to insure. (b) An insurer authorized under this title may reinsure all, or any part, of any particular risk with any solve…

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. History: (Act 2021-235, §2.)

(a) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of Section 27-5B-4, 27-5B-5, 27-5B-6, 27-5B-7, 27-5B-8, 27-5B-8.1, or 27-5B-9. (b)…

Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this state. History: (Act 2013-209, p. 463, §1.)

Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the commissioner as a reinsurer in this state. In order to be eligible for accreditation, a reinsurer must do all of the following: (1) File with the commissioner evidence of its su…

(a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is domiciled in, or in the case of a U.S. branch of an alien assuming insurer is entered through, a state that employs standards regarding credit for reinsurance substantially similar to those a…

(a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified U.S. financial institution, as defined in subsection (b) of Section 27-5B-15, for the payment of the valid claims of its U.S. ceding insurers, their assigns…

(a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is certified by the commissioner as a reinsurer in this state and secures its obligations in accordance with the requirements of this section. In order to be eligible for certification, the assu…

(a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer meeting each of the following conditions: (1) The assuming insurer shall have its head office or be domiciled in, as applicable, and be licensed in a reciprocal jurisdiction. A reciprocal jurisdictio…

Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of Section 27-5B-4, 27-5B-5, 27-5B-6, 27-5B-7, 27-5B-8, or 27-5B-8.1, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by appl…

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 w…

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 atto…

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 fluctu…

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,…

(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 cl…