Published: 2015
Key Benefits:
As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:
(1) ACTUARY. A person who is a member in good standing of the American Academy of Actuaries.
(2) INSURER. A person defined in subdivisions (2) and (3) of Section 27-1-2.
(3) MANAGING GENERAL AGENT. Any person, firm, or association who does both of the following:
a. Manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office.
b. Acts as a producer for an insurer whether known as a managing general agent, manager, or other similar term, who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with one or more of the following activities related to the business produced:
1. Adjusts or pays claims in excess of an amount determined by the commissioner.
2. Negotiates reinsurance on behalf of the insurer.
c. Notwithstanding the above, the following persons shall not be considered as managing general agents for the purposes of this chapter:
1. An employee of the insurer.
2. A United States manager of the United States branch of an alien insurer.
3. An underwriting manager who, pursuant to contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, subject to the Alabama Insurance Holding Company System Regulatory Act, Chapter 29, commencing with Section 27-29-1, of this title, and whose compensation is not based on the volume of premiums written.
4. The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney.
(4) POLICYHOLDER SURPLUS. The excess of assets over liabilities.
(5) UNDERWRITE. The authority to accept or reject risk on behalf of the insurer.