Ala. Admin. Code r. 482-1-096-.04 - Eligibility Of Alien Insurers

Surplus lines insurance may be placed with alien insurers only if the insurer:

(a) Has established satisfactory evidence of good repute and financial integrity.

(b) Is authorized as an insurer to insure risks in its country of domicile; has transacted insurance under such authority in its country of domicile for not less than the immediately past five years, unless wholly owned by an authorized insurer; and is actively regulated as an insurer by its country of domicile pursuant to regulations which mandate adequate reserving and financial integrity.

(c) If not authorized to transact insurance in at least one state of the United States, has established an effective trust fund of at least $2,500,000 within the United States administered by a recognized financial institution and held for the benefit of its policyholders or policyholders and creditors and consisting of cash, securities, or of investments of substantially the same character and quality as those which are eligible investments for the capital and statutory reserves of admitted insurers authorized to write like kinds of insurance in this state. Such trust fund, which shall be included in any calculation of capital and surplus or its equivalent, shall have an expiration date which at no time shall be less than five (5) years. The recognized financial institution administering the trust shall be independent of any person affiliated with the alien insurer.

(d) Is financially sound.

(e)

1. Has provided to the Commissioner and the surplus lines broker a copy of its current annual statement certified by such insurer. The annual statement shall be provided each year to the Commissioner within thirty (30) days from the time it is submitted to the regulatory agency in the insurer's country of domicile, and must be either:

(i) Filed with and approved by the regulatory authority in the country of domicile of the insurer, or

(ii) Certified by an accounting or auditing firm licensed either in the country of domicile of the insurer or in the United States.

2. The annual statement shall be provided to each surplus lines broker on the first occasion of each year in which such broker proposes to place insurance with the insurer. The surplus lines broker must be satisfied as to the financial soundness of the insurer prior to the placement of the insurance.

Author: Commissioner of Insurance

Notes

Ala. Admin. Code r. 482-1-096-.04

New: September 23, 1996; effective October 3, 1996. Filed for codification in the Alabama Administrative Code by the Department of Insurance on November 14, 2005, pursuant to the Code of Ala. 1975, § 27-7-43.

Statutory Authority: Code of Ala. 1975, §§ 27-2-17; 27-10-1, et seq.