This text of Alabama § 27-10-26 (Eligibility of Insurers for Placement of Surplus Line Insurance) is published on Counsel Stack Legal Research, covering Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
(a)A surplus line broker shall not knowingly place surplus line insurance with an insurer that is unsound financially or that is ineligible under this section. The broker shall ascertain the financial condition of the unauthorized insurer before placing insurance therewith.
(b)The broker
may only place insurance
with
an insurer meeting one
of the following:
(1)An
insurer
authorized
in at least one state of the United States for the kind of insurance involved, and with capital or surplus, or both, amounting to at least five million dollars ($5,000,000); or guaranteed trust fund amounting to at least five million dollars ($5,000,000).
(2)An
alien insurer
authorized to transact insurance in at least one state of the United States
or an unauthorized insurer listed on the Quarterly Listing
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(a) A surplus line broker shall not knowingly place surplus line insurance with an insurer that is unsound financially or that is ineligible under this section. The broker shall ascertain the financial condition of the unauthorized insurer before placing insurance therewith.
(b) The broker
may only place insurance
with
an insurer meeting one
of the following:
(1)
An
insurer
authorized
in at least one state of the United States for the kind of insurance involved, and with capital or surplus, or both, amounting to at least five million dollars ($5,000,000); or guaranteed trust fund amounting to at least five million dollars ($5,000,000).
(2)
An
alien insurer
authorized to transact insurance in at least one state of the United States
or an unauthorized insurer listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the National Association of Insurance Commissioners and
the insurer shall have established an effective trust fund of at least two million five hundred thousand dollars ($2,500,000) within the United States administered by a recognized financial institution and held for the benefit of all its policyholders or policyholders and creditors in the United States, and with capital or surplus, or both, amounting to at least fifteen million dollars ($15,000,000).
(3)
A
foreign or alien insurer that has transacted insurance as an authorized insurer in its
domicile
state or country
for
not
less than five years, unless it is a wholly owned subsidiary of an insurer authorized to transact insurance in this state or unless it makes a deposit in this state as may be permitted under subsection (c).
(4)
An
insurer
controlled,
in whole or substantial part
,
by any government or governmental agency.
(5)
Any
insurer made ineligible as a surplus line insurer by order of the commissioner received by or known to the broker. The commissioner may issue an order of ineligibility if he or she finds that the insurer:
a. Does not meet the financial requirements of this section;
b. Has without just cause refused to pay valid claims arising under its contracts in this state or has otherwise conducted its affairs in a manner as to result in injury or loss to the insuring public of this state; or
c. Has conducted its affairs in a manner as to result in the avoidance of payment of tax as required by Sections 27-10-31 and 27-10-35.
(c) When it appears after a search of surplus lines insurers that any particular insurance risk that is eligible to be placed in accordance with the surplus line law but on which insurance coverage, in whole or in part, is not procurable from foreign or alien insurers meeting all of the requirements of subsection (b) but is procurable from a foreign or alien insurer meeting all of the requirements of subsection (b) except for
subdivision
(3), then the surplus line broker may file a supplemental signed statement setting forth the facts and advising the department that the part of the risk as shall be unprocurable, as aforesaid, is being placed with named unauthorized insurers that meet all of the requirements of subsection (b) except for
subdivision
(3), in the amounts and percentages set forth in the statement. These named unauthorized insurers, before accepting any risk in this state, shall deposit with the department cash or securities acceptable to the commissioner and with a market value of not less than one million dollars ($1,000,000), which deposit shall be held by the department for the benefit of Alabama policyholders only. The deposit shall be held in the same manner as other deposits as described in Section 27-3-11. The commissioner may adopt reasonable rules for the implementation and administration of this section.