HB142 Alabama 2013 Session

Summary

Primary Sponsor

Mike Hill

Republican

Session

Regular Session 2013

Title

Insurance, insurance fraud, elements of modified, overcharging insurers included, Secs. 27-12A-2, 27-27-26 am'd.

Summary

HB142 updates Alabama's insurance fraud definitions and fixes amendment errors, while tightening governance rules for domestic insurers’ officers and directors.

What This Bill Does

It broadens the insurance fraud definition to cover specific acts such as applying for or renewing insurance when the insurer can't pay claims, destroying or altering records, theft or embezzlement related to insurance, and presenting false information in applications, policies, ratings, or claims. It explicitly includes overcharging for goods or services as part of an insurance claim. It clarifies when record destruction is allowed under law. It also tightens restrictions on officers’ and directors’ financial dealings with the insurer, subject to certain exceptions, and gives the regulator authority to add further exceptions. The act becomes effective immediately after passage and governor’s approval.

Who It Affects

• Insurers, reinsurers, policyholders, and other participants in the Alabama insurance market (definitions of fraud and related conduct apply to their activities).
• Officers, directors, and employees of domestic insurers (restrictions on deposits, borrowing, financial interests, and certain compensation), with listed exceptions and regulator-created allowances.

Key Provisions

• Rewrites 27-12A-2 to define insurance fraud as knowingly defrauding or concealing material information in acts such as applying for or renewing insurance, handling assets/records, embezzlement, and providing false information in applications, ratings, claims, or related documents; adds overcharging as fraud.
• Adds specific fraudulent behaviors related to claims, deductions, rebates, premium handling, and other policy-related actions.
• Maintains allowed record destruction only under applicable record retention laws or insurer policies; clarifies when destruction is not considered fraudulent.
• Amends 27-27-26 to prohibit officers/directors of domestic insurers from certain financial actions (deposits, borrowing, financial interests) and to prohibit guaranteeing insurers’ obligations, with enumerated exceptions (stock ownership, certain funds, government/foreign bonds, etc.).
• Allows reasonable compensation for directors or services rendered, with the commissioner empowered to create additional exceptions to facilitate ordinary course of business.
• Effective date set as immediately after passage and governor’s 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