SB283 Alabama 2018 Session

Summary

Primary Sponsor

Mark Slade Blackwell

Republican

Session

Regular Session 2018

Title

Insurance companies, unsolvenices, Alabama Insurance Guaranty Association Act, provisions conformed to most recent model act, obligation of assoc. to pay covered claims before order of liquidation of insolvent insurer, statutory cap for benefits and aggregate cap provided, Secs. 27-42-3, 27-42-5, 27-42-8, 27-42-11, 27-42-12 am'd.

Summary

SB 283 updates Alabama's Insurance Guaranty Association Act to align with the latest model act, requires paying covered claims before insurer liquidation, and raises the per-claim protection to $300,000 with an aggregate cap.

What This Bill Does

It conform the act to the most recent model act and adds new definitions. It requires the Alabama Insurance Guaranty Association to pay covered claims before an insolvency order of liquidation is entered. It increases the per-claim protection from $150,000 to $300,000 and provides for an aggregate cap. It clarifies which kinds of insurance are covered and enhances the association's funding and recovery powers, including the ability to pursue sums from high net worth insureds and their affiliates and to levy assessments on member insurers.

Who It Affects

• Claimants and policyholders in Alabama will benefit from earlier payment of covered claims before liquidation and a higher per-claim limit (up to $300,000, subject to the aggregate cap).
• Member insurance companies (and the association) will be affected by new funding rules, including assessments (with caps and potential deferments) and the association's authority to recover amounts from high net worth insureds and affiliates.

Key Provisions

• Conforms sections 27-42-3, 27-42-5, 27-42-8, 27-42-11, and 27-42-12 to the latest model act and adds new definitions.
• Requires the association to pay covered claims before an insolvency liquidation order is issued, with specified payment amounts (including workers' compensation full payment and limits for unearned premiums and other covered claims).
• Raises the statutory cap for a covered claim from $150,000 to $300,000 and provides for an aggregate cap per insolvency.
• Maintains and clarifies the range of insurance types covered, establishes funding mechanisms (three accounts, member insurer assessments, and notice requirements), allows deferment if necessary to protect capital, and empowers recovery actions against high net worth insureds and their affiliates.

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