Alabama Administrative Code
Title 482 - ALABAMA DEPARTMENT OF INSURANCE
Chapter 482-1-106 - MANAGING GENERAL AGENTS
Section 482-1-106-.04 - Filings Required Within 30 Days Of Appointment Of An MGA

Universal Citation: AL Admin Code R 482-1-106-.04

Current through Register Vol. 43, No. 02, November 27, 2024

(1) Any insurer who is required under Rule 482-1-106-.03 to file for appointment of a managing general agent (MGA) must complete and file all of the following within thirty (30) days of that appointment:

(a) The appointment Form AL-MGA-1. This form must list all information requested, including, but not limited to, the name and Alabama insurance producer license number of the MGA. Attached to Form AL-MGA-1 shall be both of the following exhibits, unless the insurer has obtained an express waiver from the Commissioner:
1. A copy of a fidelity bond for the protection of the insurer in the minimum amount of one hundred thousand dollars ($100,000) with no deductible.

2. A copy of the MGA's errors and omissions liability policy with coverage limits in the minimum amount of one million dollars ($1,000,000) or 25% of the gross amount of direct written premium received by an insurer for the previous calendar year that is attributable to the MGA, whichever is greater.

(b) A duplicate copy of the executed contract between the MGA and the insurer. Form AL-MGA-2 is the form which must be used by all insurers domiciled in this state as the contract. An insurer not domiciled in this state must also use Form AL-MGA-2, unless the insurer is domiciled in a state having a law substantially similar to the Alabama Managing General Agents Act and the insurer files a contract which complies with the provisions of the MGA Act.

(c) A nonresident MGA must appoint the Alabama Commissioner of Insurance as the MGA's agent for service of process, which is included on the Form AL-MGA-1.

(d) If the MGA is a business entity, it shall also file a certificate of existence, if a domestic business entity, or a certificate of authority, if a foreign business entity [either of which can be obtained from the Alabama Secretary of State], at the time of filing the original application.

(e) If the insurer did business with the MGA in the previous year, it shall also file a copy of the annual independent financial examination of the MGA as required in Section 27-6A-5(1) and described further in Rule 482-1-106-.05.

(2) The fidelity bond or commercial crime policy and errors and omissions liability policy referred to in Subparagraph (a) of Paragraph (1) above shall have been issued by an insurer authorized in this state and otherwise acceptable to the Commissioner, and shall not be written by the insurer or an affiliate of the insurer contracting with the MGA. The errors and omissions policy coverage limits [set at $1,000,000 or 25% of the gross amount of direct written premium received by the insurer for the previous calendar year that is attributable to the MGA, whichever is greater] and the fidelity bond or commercial crime policy coverage limits [set at the greater of $100,000 or 25% of the premium written by the MGA on behalf of the appointing insurer in Alabama for the previous calendar year, whichever is greater] shall be adjusted accordingly on or before April 1st of each year.

(3) The contract referred to in Subparagraph (b) of Paragraph (1) above shall contain all of the statutorily required provisions, including a requirement that the MGA provide the insurer with a copy of any claim file at its request or as soon as it becomes known to the MGA that the claim has the potential to exceed $10,000 or exceeds the amount set by the insurer, whichever is less, or that the claim is closed by payment of an amount in excess of $10,000 or an amount set by the insurer, whichever is less.

Author: Commissioner of Insurance

Statutory Authority: Code of Ala. 1975, §2 7-2-17 & §2 0, Act 93-675.

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.
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