HB729 Alabama 2012 Session

Summary

Primary Sponsor

Joseph C. Mitchell

Democrat

Co-Sponsors

Napoleon BracyRod ScottJim BartonSteve McMillanChad FincherJoe FaustVictor GastonRandy DavisJames E. BuskeyYvonne KennedyDavid Sessions

Session

Regular Session 2012

Title

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

Summary

HB729 defines Alabama's Coastal Area into four zones and creates a two-unit credit system for voluntary insurance writings in that area.

What This Bill Does

The Coastal Area is defined as Zones 1 through 4, with Unit One covering Zones 1-3 and Unit Two covering Zone 4. Credits for voluntary writings in the Coastal Area are calculated separately for each unit: 100% for fire insurance, 75% for homeowners and mobile homeowners, and 50% for commercial multi-perils. Premiums eligible for credit exclude wind/hail policies and farm premiums, and credits are determined based on each unit's share of a member insurer's Alabama net direct premiums; the bill also sets rules for how assessments, surplus, and related finances are managed.

Who It Affects

• Insurers that are members of the Alabama Insurance Underwriting Association, who would participate in the two-unit credit system, share in writings, expenses, profits, losses, and potential assessments.
• Coastal Area residents seeking insurance (homeowners, mobile homeowners, and commercial multi-perils) in Zones 1-4, who could be affected indirectly through changes in insurance pricing or availability driven by the unit-based credits.

Key Provisions

• Defines the Coastal Area as Zones 1-4 designated by the Alabama Insurance Underwriting Association and establishes two credits units: Unit One (Zones 1-3) and Unit Two (Zone 4).
• Implements unit-specific credits for voluntary writings: 100% for fire policies, 75% for homeowners and mobile homeowners, 50% for commercial multi-perils; credits are calculated separately for each unit with premiums excluding wind/hail and farm premiums ineligible.
• Requires participation of all association members in writings, expenses, profits, and losses in proportion to each member's net direct Alabama premiums; allows separate credit calculations per unit and per unit premiums.
• Allows the association to carry over unexpended surplus to future years and use funds for expenses, claims, reinsurance costs, and related activities; permits issuing bonds and seeking loans or grants.
• Provides for assessment deferral if paying would threaten insurer solvency or policyholders' safety, with deferred amounts to be repaid with interest; allows protest and potential refund if an assessment is deemed unjust or illegal, with disciplinary actions for nonpayment.
• Effective date: becomes law on the first day of the third month after passage and governor approval.

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