HB76 Alabama 2011 Session

Updated Feb 27, 2026

Low Interest

Summary

Primary Sponsor: Gregory Canfield
Republican
Co-Sponsor: Greg Wren
Session: Regular Session 2011
Title: Surplus Lines Insurance Multi-State Compliance Compact Commission, established, Surplus Lines Insurance Multi-State Compliance Compact Act
Summary: HB76 creates a Surplus Lines multi-state compact to coordinate regulation, tax collection, and data reporting for multi-state surplus lines and independently procured insurance, with Alabama joining; it takes effect only after two states enact it and thresholds based on state count or premium volume are reached.
What This Bill Does
It establishes a Commission and a Clearinghouse to manage uniform rules, tax payments, and data sharing for non-admitted insurance across states. It requires exclusive single-state regulatory compliance for multi-state risks, with the Home State leading on licensing, eligibility, and compliance, and allocates premium taxes among Compacting States using uniform formulas. It also amends Alabama's surplus lines broker tax to a 6% direct-premium rate (subject to the compact being enacted) and sets reporting, auditing, and governance structures; the compact becomes effective only after specified state participation thresholds are met and two states enact it.

Who It Affects
Surplus Lines Licensees and Surplus Lines Insurers: must follow Home State rules for multi-state risks, report data to the Clearinghouse, and pay premium taxes allocated under uniform formulas.
Surplus Lines Brokers: subject to a 6% tax on direct surplus line premiums (if the compact is enacted), with deductions for exam expenses and allocation of taxes to other states through the Clearinghouse.
Insureds/Policyholders: have a Home State designation for regulatory purposes, receive uniform policyholder notices, and see premium taxes allocated across states according to the formulas.
State Insurance Departments and Stamping Offices: administer licensing, collect and report data, and coordinate with the Commission and Clearinghouse.
General Public/Taxpayers in Compacting States: gain standardized procedures, potential transparency in tax reporting, and public meeting requirements.

Key Provisions
Exclusive single-state regulatory compliance for Non-Admitted Insurance of Multi-State Risks, with Home State authority handling key licensing and eligibility matters.
Creation of the Surplus Lines Insurance Multi-State Compliance Compact Commission, empowered to adopt mandatory Rules, establish Allocation Formulas, and operate a Clearinghouse for Premium Tax and transaction data.
Uniform Allocation Formulas and Clearinghouse Transaction Data reporting requirements to allocate and distribute premium taxes among Compacting and Contracting States; taxes paid through the Clearinghouse.
Uniform Rules for Premium Tax payment, reporting, and data collection; Home State regulatory compliance applies to both Multi-State Risks and Independently Procured Insurance; uniform Policyholder Notices and treatment of Purchasing Groups.
Tax framework allowing each state to charge a single rate of taxation on allocated premiums (with stamping fees potentially embedded); rate changes require at least 90 days’ advance notice.
Amendment of Section 27-10-31 (Alabama) to impose a 6% surplus lines tax on direct premiums, prorated for partial in-state risks, with a deduction for examination expenses, contingent on the compact being enacted by two states.
Funding and financial governance of the Commission, including budgeting, audits, reporting to governors/legislatures, and prohibition on political contributions or lobbying by the Commission.
Dispute resolution and default/withdrawal provisions, with the possibility of dissolution if membership falls to one state; amendments require consent of all compacting states.
Effective date structure: the compact becomes binding after two states enact it and sufficient participation; Clearinghouse operations begin after the Commission’s initial milestones (first anniversary) and are described for subsequent joiners with advance notice.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Insurance