HB142 Alabama 2024 Session

Summary

Primary Sponsor

Corley EllisRepresentative

Republican

Session

Regular Session 2024

Title

Insurance Dept, insurers required to be licensed, unauthorized insurers, exceptions for surplus line brokers, further provided for, authority for membership in the Surplus Line Insurance Multi-State Compliance Compact Act repealed.

Summary

HB142 updates Alabama's surplus line insurance rules to align with NAIC guidelines, strengthen broker licensing and reporting, and repeal the Surplus Lines Multi-State Compliance Compact Act.

What This Bill Does

HB142 updates Alabama's surplus line insurance rules to align with NAIC's Nonadmitted Insurance Model Act and federal diligent-search rules. It allows surplus-line brokers to file placed coverage reports quarterly instead of every 30 days and requires nonresident brokers to follow the same rules as resident brokers. It requires broker fees to be disclosed in the policy for consumer protection, eliminates zero premium reporting, and defines the home state using federal definitions. It also repeals the Surplus Lines Multi-State Compliance Compact Act, imposes a 6% tax on direct surplus-line premiums, and sets new licensing, bonding, and reporting requirements with an effective date of July 1, 2024.

Who It Affects

• Surplus-line brokers (both resident and nonresident) would face updated licensing, bonding, annual renewal, and reporting requirements, plus new rules about broker fees and the handling of coverage placed with unauthorized insurers.
• Alabama policyholders and consumers would gain stronger protections and transparency, including disclosure of broker fees, verification of diligent-search conducted coverage, and safeguards like deposits for certain unauthorized insurers to protect payments and claims.

Key Provisions

• Adopts NAIC's Nonadmitted Insurance Model Act revisions, enforces federal diligent-search exemptions, requires quarterly surplus-line reports, ensures nonresident brokers follow the same rules as residents, defines home state, and repeals the Surplus Lines Multi-State Compliance Compact Act.
• Adds financial protections and fees for surplus-line activity, including broker bonding and license fees, per-policy fee disclosures, a 6% tax on direct surplus-line premiums, and rules about insurer eligibility, deposits for unauthorized insurers, and safeguards for Alabama policyholders.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance