Alabama Administrative Code
Title 482 - ALABAMA DEPARTMENT OF INSURANCE
Chapter 482-1-094 - SURPLUS NOTES
Section 482-1-094-.06 - Written Agreements
Current through Register Vol. 42, No. 11, August 30, 2024
When issuing a surplus note, the insurer must execute a written agreement with the creditor, providing the following:
(a) The creditor may be paid only out of the portion of the insurer's surplus that exceeds the minimum surplus stated in the agreement;
(b) The minimum surplus or "floor" shall exceed the sum of (i) 10% of the face amount of the surplus note plus, (ii) the greater of the statutory minimum capital and surplus required by statute, rule, or regulation applicable to the issuing insurer or the total stated capital and surplus of the insurer immediately before the issuance of the surplus note; or, the Commissioner may approve a different amount if the Commissioner is satisfied such amount is appropriate, considering the financial condition of the insurer;
(c) All payments of principal and interest shall be subject to the prior approval of the Commissioner;
(d) In the event of liquidation, payment of interest and repayment of principal under the written agreement are subordinated to policyholder and beneficiary claims.
Author: Commissioner of Insurance
Statutory Authority: Code of Ala. 1975, §§ 27-27-40, 27-2-7, 27-2-17, 27-27-1, 27-27-2.
