§ 27-10-53 — Defense of Action or Proceeding by Insurer

Alabama § 27-10-53

• Jurisdiction: Alabama
• Title 27: Insurance
• Ch. 10: Unauthorized Insurers and Surplus Lines
• Art. 3: Unauthorized Insurers Process Act

Text

(a) Before an unauthorized insurer shall file, or cause to be filed, any pleading in any action or proceeding instituted against it under Sections 27-10-51 and 27-10-52, such insurer shall:
(1) Procure a certificate of authority to transact insurance in this state; or
(2) Deposit with the clerk of the court in which such action or proceeding is pending cash or securities or file with such clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be entered in such action. The court may, in its discretion, make an order dispensing with such deposit or bond where the insurer makes a showing satisfactory to the court that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in such action or proceeding and that the insurer will pay any final judgment entered therein without requiring an action to be brought on such judgment in the state where such funds or securities are located.
(b) The court, in any action or proceeding in which service is made in the manner provided in Section 27-10-52, may, in its discretion, order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (a) of this section, and to defend such action.
(c) Nothing in subsection (a) of this section is to be construed to prevent an unauthorized insurer from filing a motion to quash or to set aside the service of any process made in the manner provided in Section 27-10-52 on the ground either:
(1) That such unauthorized insurer has not done any of the acts enumerated in Section 27-10-51; or
(2) That the person on whom service was made pursuant to subsection (b) of Section 27-10-52 was not doing any of the acts therein enumerated.

Legislative History

(Acts 1951, No. 768, p. 1335, §3; Acts 1971, No. 407, p. 707, §217.)