Alabama Administrative Code
Title 482 - ALABAMA DEPARTMENT OF INSURANCE
Chapter 482-1-096 - PLACEMENT OF INSURANCE THROUGH ALIEN UNAUTHORIZED INSURERS
Section 482-1-096-.05 - Determination Of Financial Soundness
Universal Citation: AL Admin Code R 482-1-096-.05
Current through Register Vol. 42, No. 5, February 29, 2024
(1) The following shall be the minimum considerations for determining the financial soundness of an alien surplus lines insurer:
(a) The value of any assets to
be considered in the determination of financial soundness shall be readily
ascertainable.
(b) The language
contained in the required trust agreement shall be consistent with the
requirements of the NAIC regarding alien non-admitted insurers, except as to
the minimum amount of the trust fund.
(c) The annual financial statement of each
surplus lines company shall accurately reference the admissible assets,
liabilities, capital, and/or surplus of the insurer as of year-end of the
preceding year.
(d) No surplus
lines insurer shall retain any risks on any one subject of insurance in an
amount exceeding 10% of its surplus to policyholders.
(e) No surplus lines insurer shall exceed a
net premiums written to policyholder surplus ratio of 3.5 to 1.
(f) No surplus lines insurer shall maintain
an admitted assets to premiums written ratio of less than 1.
(g) Any securities maintained for the benefit
of U.S. policyholders shall be on the list of the "Securities Valuation Office"
of the NAIC as being eligible for amortization and classed as 1, 2, or 3
(highest, high, or medium quality).
(h) Any alien non-admitted insurer on the
listing of the Non-Admitted Insurers Information Office of the NAIC shall be
deemed to be in compliance with these financial requirements, until otherwise
determined by the Commissioner.
(i)
The company shall adjust the amount of assets in its statutory trust fund
according to its premium volume, policy limits, reinsurance, reserves, and
liabilities so that the trust fund provides adequate protection to
policyholders and creditors. The Commissioner may require periodic increases or
allow decreases in the amount held in the statutory trust, except that the
trust amount shall never be less than the minimum statutory
requirement.
(2) Notwithstanding these requirements, the Commissioner may exercise his authority under Section 27-10-26(b)(5), Code of Ala. 1975, for the reasons stated therein including the financial soundness of the company.
Author: Commissioner of Insurance
Statutory Authority: Code of Ala. 1975, §§ 27-2-17; 27-10-1, et seq.
Disclaimer: These regulations may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.