SB197 Alabama 2010 Session

Summary

Primary Sponsor

Ben H. Brooks

Republican

Co-Sponsors

Trip PittmanRusty Glover

Session

Regular Session 2010

Title

Alabama Insurance Underwriting Association, Coastal Area defined, credit for insurance writings in Coastal Area, Sec. 27-1-24 am'd.

Summary

SB197 redefines Alabama's Coastal Area into four zones and creates a two-unit credit system for voluntary writings under the Alabama Insurance Underwriting Association, with specific credit levels for different policy types.

What This Bill Does

Defines the Coastal Area as Zones 1–4. Creates Unit One (Zones 1–3) and Unit Two (Zone 4) for credits and requires credits to be calculated separately for each unit. Sets credit percentages: 100% for fire policies, 75% for homeowners and mobile homeowners, and 50% for commercial multi‑perils, for voluntary writings in the Coastal Area; credits apply to premiums within each unit (wind/hail and farm premiums are not eligible). Requires all member insurers to participate in writings, expenses, profits, and losses in proportion to Alabama net direct premiums; addresses assessments, deferrals, and refunds if unjust. Becomes effective on the first day of the third month after passage and governor approval.

Who It Affects

• Insurers that are members of the Alabama Insurance Underwriting Association — their credits and financial participation would be organized by two units and affect how voluntary writings are credited and how expenses and losses are shared.
• Policyholders in the Coastal Area (Zones 1–4) — potential changes to premiums for fire, homeowners/mobile homeowners, and commercial multi-perils policies written in those zones due to the unit-based credits.

Key Provisions

• Coastal Area defined as Zones 1–4 designated by the Alabama Insurance Underwriting Association (becoming the operative Coastal Area).
• Two credit units established: Unit One = Zones 1–3; Unit Two = Zone 4; credits calculated separately for each unit.
• Credit rates for voluntary writings: 100% for fire policies, 75% for homeowners/mobile homeowners, 50% for commercial multi-perils; credits apply to premiums within each unit; wind/hail and farm premiums are not eligible.
• Participating insurers share in writings, expenses, profits, and losses in proportion to each unit’s net direct premiums written in Alabama; unit-based credits determined separately for each unit.
• Financial provisions include potential deferral of assessments to avoid insolvency risk, and refunds if assessments are unjust or illegal, with protest rights and penalties for nonpayment.
• Effective date: first day of the third month after passage and governor approval (or otherwise becoming law).
• References to Beach Area are superseded; Coastal Area now comprises Zones 1–4 as designated by AIUA.

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