HB608 Alabama 2010 Session

Summary

Primary Sponsor

Demetrius C. Newton

Democrat

Session

Regular Session 2010

Title

Insurance, discretionary clause in insurance policies prohibited, interpretation clause in insurance policy to be void and unenforceable

Summary

HB608 would void any discretionary interpretation clause in Alabama insurance policies, prohibiting insurers from reserving the right to interpret terms or set interpretation standards.

What This Bill Does

It bans clauses that reserve discretion to the insurer to interpret the policy terms or to provide interpretation standards, making those clauses void and unenforceable in policies offered or issued in Alabama. If enacted, policy terms would generally be interpreted based on the wording of the policy rather than insurer-provided interpretive discretion. The act becomes effective on the first day of the third month after it is passed and approved by the Governor.

Who It Affects

• Policyholders/insureds in Alabama, who would gain protection from insurer-discretionary interpretation clauses in their policies.
• Insurance companies and insurers issuing policies in Alabama, who would be prohibited from including discretionary interpretation clauses.

Key Provisions

• A clause in a policy or certificate of insurance that reserves discretion to the insurer to interpret terms or provide interpretation standards is void and unenforceable.
• The act becomes effective on the first day of the third month after its passage and approval by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance