SB413 Alabama 2014 Session

Summary

Primary Sponsor

Paul Bussman

Republican

Session

Regular Session 2014

Title

Bail bond surety insurers, regulation by Insurance Department, amount of unearned premium reserve specific required, Sec. 27-36-3.1 added

Summary

SB413 creates a bail bond-specific reserve for bail bond insurers and lets the Insurance Commissioner require it, with detailed calculation and reporting rules.

What This Bill Does

The bill allows the Commissioner of Insurance to require bail bond insurers (or limited insurers) to establish and maintain a special reserve on bail bonds and other single-premium bonds without a definite expiration date. The reserve amount is the lesser of 35% of the bail premiums in force or $7 per $1,000 of bail liability, and it must be shown as a liability in financial statements filed with the Commissioner along with a supplementary schedule detailing bail premiums in force, bail liability, and the reserve for bail/judicial bonds. Bail premiums in force exclude amounts retained by licensed bail bond agents or licensed managing general agents, but total bail consideration must provide a minimum of 6.5%. The act becomes effective immediately after passage and approval.

Who It Affects

• Bail bond surety insurers (and limited insurers) would be required to establish and report a bail-bond-specific reserve with the specified calculation and accompanying financial statement disclosures.
• Licensed bail bond agents and licensed managing general agents, whose retained amounts are excluded from the reserve calculation, while still subject to the overall bail bond framework and a 6.5% minimum of total bail consideration.

Key Provisions

• Adds Section 27-36-3.1 permitting the Insurance Commissioner to require a bail-bond-specific reserve in lieu of the general unearned premium reserve for bail bond and single-premium bonds.
• The reserve on bail bonds is the lesser of 35 percent of bail premiums in force or $7 per $1,000 of bail liability, and is reported as a liability on required financial statements.
• Insurers must file a supplementary schedule showing bail premiums in force, bail liability, and the related special reserve for bail and judicial bonds with financial statements.
• Bail premiums in force do not include amounts retained by licensed bail bond agents or licensed managing general agents; however, the total bail consideration must be no less than 6.5 percent for all bail bonds in force.
• The act becomes effective immediately upon passage and approval.

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