Ala. Code § 27-43-9 (1975) Bond Or Deposit Requirements

• Library: Alabama Statutes
• Edition: 2023
• Currency: Current with legislation from the 2023 Regular and Special Sessions.
• Year: 2023
• Citation: Ala. Code § 27-43-9 (1975)

(a) To assure the faithful performance of its obligations in the event of insolvency, each corporation authorized under Section 27-43-8 shall, through the commissioner, deposit and maintain with the Treasurer of the State securities of the type eligible for deposit by insurers under Section 27-6-3, which securities shall have at all times a market value as follows:

(1) An insurer which has transacted no legal expense insurance in this state prior to January 1, 1982, shall, prior to the issuance of its certificate of authority and before receiving any premiums, place in trust with the Treasurer of the State, through the commissioner an initial amount of $50,000.00;

(2) An insurer transacting a legal expense insurance business in this state prior to January 1, 1982, and having in force in this state less than $300,000.00 of gross written premiums, membership fees, or similar charges shall place in trust with the Treasurer of the State, through the commissioner, a sum equal to 50 percent of the gross premiums in force or $50,000.00, whichever is less;

(3) An insurer transacting a legal expense insurance business in this state prior to January 1, 1982, and having in force in this state more than $300,000.00 but less than $750,000.00 of gross written premiums, membership fees, or similar charges in this state shall place in trust with the Treasurer of the State, through the commissioner, an amount not less than $75,000.00; and

(4) An insurer transacting a legal expense insurance business in this state prior to January 1, 1982, and having in force in this state $750,000.00 or more of gross written premiums, membership fees, or similar charges in this state shall place in trust with the Treasurer of the State, through the commissioner, an amount equal to $100,000.00.

(b) In lieu of any deposit of securities required under subsection (a) of this section and subject to the commissioner's approval, a legal service insurance corporation may file with the Treasurer of the State a surety bond issued by a surety insurer authorized to serve as surety under the provisions of Chapter 24 of this title. The bond shall be for the same purpose as the deposit in lieu of which it is filed. The department shall not approve any bond under the terms of which the protection afforded against insolvency is not equivalent to the protection afforded by those securities provided for in subsection (a) of this section.