SB10 Alabama 2010 Session

Summary

Primary Sponsor

Trip Pittman

Republican

Session

Regular Session 2010

Title

Insurance, surplus lines insurance, foreign and alien insurers, requirement for transacting insurance for minimum of five years in its state or country of domicile, exception under certain conditions, Sec. 27-10-26 am'd.

Summary

SB10 allows certain foreign and alien surplus line insurers to transact in Alabama with less than five years in their domicile if they make a qualified deposit in the state.

What This Bill Does

It creates an exception to the five-year domicile requirement for foreign and alien surplus line insurers by letting them operate in Alabama if they meet a required deposit or ownership condition. It sets financial and control rules they must meet (including minimum capital and trust fund levels) and gives the state authority to place restrictions or bar insurers that don't meet these rules. It also lets surplus line brokers file supplemental statements when a risk isn’t available from authorized insurers, with certain unauthorized insurers needing to place a $1 million deposit for Alabama policyholders. The Department of Insurance may adopt rules to administer these changes, and the act takes effect immediately after passage.

Who It Affects

• Foreign and alien surplus line insurers seeking to transact in Alabama, who may be allowed to operate with less than five years in their domicile if they meet deposit or subsidiary requirements and other financial conditions.
• Surplus line brokers and Alabama policyholders, who must follow new financial checks, deposits, and safeguarding rules for insured risks and for the department to administer deposits.

Key Provisions

• Adds an exception to the five-year domicile requirement for foreign or alien surplus line insurers if they make a deposit in Alabama (or are a wholly owned subsidiary of an Alabama-authorized insurer).
• Sets minimum financial requirements for eligibility: (a) authorized in at least one state with capital/surplus or guaranteed trust fund of $5,000,000; (b) alien insurer not authorized in any state must have a U.S. trust fund of $2,500,000 and capital/surplus of $15,000,000; (c) for those with less than five years in domicile, deposit or subsidiary conditions apply; (d) voting control not held by government.
• Allows the commissioner to issue ineligibility orders for insurers that fail financial tests, refuse to pay valid claims, or evade taxes.
• Permits surplus line brokers to file supplemental statements if a risk eligible for surplus lines cannot be procured from authorized insurers meeting most requirements (except for the less-than-five-years rule), with named unauthorized insurers required to deposit at least $1,000,000 with the department for the benefit of Alabama policyholders.
• authorizes the commissioner to adopt rules to implement and administer these provisions.
• Makes the act effective immediately after passage.

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