SB375 Alabama 2012 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Tammy Irons
Democrat
Session: Regular Session 2012
Title: Insurance, Alabama Life and Disability Insurance Guaranty Association scope and purpose, specify limits for certain policies, to conform Alabama law to model law, Secs. 27-44-2, 27-44-3, 27-44-5, 27-44-8, 27-44-9, 27-44-11, 27-44-18 am'd
Summary: SB375 updates Alabama's Life and Disability Insurance Guaranty Association rules to align with the NAIC model, expanding coverage rules, limits, and funding procedures.
What This Bill Does
The bill clarifies who is covered by ALDIGA (including payees under structured settlement annuities) and makes coverage depend on residency for structured settlements. It sets detailed limits for life, disability, and annuity benefits, including a per‑life cap and a per‑owner cap, and a separate present-value limit for structured settlements. It increases the Class A assessment cap, extends the time to appeal decisions, and lengthens the stay of insolvency proceedings. It also requires coordination with guaranty associations in other states to avoid duplicate coverage and allows ALDIGA to guarantee or reinsure covered policies as needed during insolvencies.

Who It Affects
Policyowners, insureds, beneficiaries, annuitants, payees, and structured settlement recipients in Alabama who would receive protections or have coverage through ALDIGA.
ALDIGA member insurers licensed to operate in Alabama, which face updated coverage rules, higher assessment caps, longer appeal and stay periods, and increased coordination responsibilities.

Key Provisions
Specifies coverage for payees under structured settlement annuities based on the payee's residency (not the owner), and requires coordination with guaranty associations in other states to avoid duplicate coverage.
Sets explicit coverage limits: life insurance death benefits up to $300,000 with up to $100,000 in cash surrender; disability benefits up to $300,000 for disability income and long‑term care, $500,000 for basic hospital/medical/major medical, and $100,000 for other; annuity present value limits of $250,000 per payee; aggregate could be higher only under specific life/medical conditions, with an ultimate per‑life or per‑owner cap as described.
Raises Class A assessments to a maximum of $300 per year per member insurer; establishes Class B/C assessments for impaired or insolvent domestic and foreign/alien insurers.
Increases the time to appeal a decision of the association to the commissioner from 30 to 60 days; increases the stay of proceedings for insolvent or impaired insurers from 60 to 180 days.
Effective date is January 1 following enactment; amendments apply to Sections 27-44-2, 27-44-3, 27-44-5, 27-44-8, 27-44-9, 27-44-11, and 27-44-18.

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