The bill SB46 Enrolled proposes amendments to the Code of Alabama 1975, specifically targeting the regulation of unauthorized insurers and surplus line insurance. It prohibits individuals from representing unauthorized insurers except in cases such as surplus lines insurance, reinsurance, and certain other transactions. The bill clarifies that contracts made in violation of this prohibition do not invalidate the insured's rights and increases the penalties for those who willfully aid unauthorized insurers. It also amends the conditions under which surplus line insurance can be procured, defines "industrial insured," and sets minimum requirements for such entities. Surplus line brokers are required to file quarterly reports and ensure that insurance contracts comply with Alabama law. The bill repeals the state's membership in the Surplus Lines Insurance Multi-State Compliance Compact Act.

The bill also revises the qualifications for surplus line broker licensing, updating the application process, license fees, and bond conditions. It outlines the responsibilities of individual producers and introduces provisions for nonresident surplus line brokers. Surplus line brokers are allowed to charge a per-policy fee and must avoid placing insurance with unsound insurers, adhering to financial requirements for eligible insurers. The bill removes the five-year transaction requirement for foreign or alien insurers and updates tax provisions, setting a six percent tax on direct premiums. The bill repeals Chapter 61 of Title 27 and will become effective on July 1, 2024.

Statutes affected:
Introduced: 27-10-1, 27-10-2
Enrolled: 27-10-1, 27-10-2