Ala. Code § 27-31C-3 (1975) License to Provide Homeowners Insurance; Exemptions; Powers and Duties

• Library: Alabama Statutes
• Edition: 2023
• Currency: Current with legislation from the 2023 Regular and Special Sessions.
• Year: 2023
• Citation: Ala. Code § 27-31C-3 (1975)

(a) An Alabama Coastal Captive Insurance Company, if permitted by its articles of incorporation or organization, operating agreements, or charter, may apply to the commissioner for a license to write homeowners insurance coverage as limited in Section 27-31B-3(a)(4) and as defined and limited in the standard real property and contents insurance forms as approved by the commissioner.

(b) An Alabama Coastal Captive Insurance Company that qualified as an association captive under the provisions of Section 27-31B-8 is exempt from the requirement that the association be in existence for one year so long as the association is in good standing as an entity before becoming an owner of an Alabama Coastal Captive Insurance Company.

(c) An Alabama Coastal Captive Insurance Company may write homeowners insurance coverage as limited in Section 27-31B-3(a)(4) and as limited to perils described in subsection (a) above.

(d)

(1) An Alabama Coastal Captive Insurance Company formed as a sponsored captive insurance company:

a. Is exempt from the provisions of Section 27-31B-22(b)(9)a. that require that the business written by a sponsor captive insurance company, with respect to each protected cell, must be fronted by an insurance company licensed pursuant to the laws of a state.

b. May create a protected cell as a legal person separate from the protected cell company and may organize a protected cell under any incorporation or organization option available under Section 27-31B-8, unless the commissioner finds such option is not feasible under Section 27-31C-5.

c. May have as its sponsor an association formed to address coastal property and insurance issues.

(2) An Alabama Coastal Captive Insurance Company may issue directly its own policies to the insureds.

(e) Any Alabama Coastal Captive Insurance Company that otherwise qualifies for the limited exemption from the provisions of Section 27-31B-22(b)(9)a. pursuant to subsection (d)(1) and any Alabama Coastal Captive Insurance Company, regardless of form, that issues policies directly to the public shall comply with the following:

(1) It shall not expose itself to loss on one risk in an amount exceeding 10 percent of its surplus to policyholders and any risk or portion of it which has been reinsured must be deducted in determining this limitation of risk;

(2) It shall not have loss reserves in excess of five times its surplus to policyholders;

(3) It shall not have net premiums written in excess of three times its surplus to policyholders and any risk or portion of it which has been reinsured must be deducted in determining this limitation of risk; and