Code of Alabama - Title 27: Insurance - Section 27-29-1 - Definitions

Section 27-29-1 - Definitions.

For purposes of this chapter, unless otherwise stated, the following terms shall have the meanings respectively ascribed to them by this section:

(1) AFFILIATE. The term shall include an affiliate of, or person affiliated with, a specific person, and shall mean a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(2) COMMISSIONER. The Commissioner of Insurance, his or her deputies, or the Insurance Department as appropriate.

(3) CONTROL. The term shall include controlling, controlled by, or under common control with and shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing five percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by subsection (k) of Section 27-29-4 that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making a specific finding of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

(4) ENTERPRISE RISK. Any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, but not limited to, anything that would cause the insurer's risk-based capital to fall into company action level as set forth in Section 27-2B-4 or would cause the insurer to be in hazardous financial condition.

(5) GROUP-WIDE SUPERVISOR. The regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the commissioner under this chapter to have sufficient significant contacts with the internationally active insurance group.

(6) INSURANCE HOLDING COMPANY SYSTEM. A system which consists of two or more affiliated persons, one or more of which is an insurer.

(7) INSURER. An insurance company as set forth in Section 27-1-2, including, without limitation, any fraternal benefit society, health care service plan, and health maintenance organization, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.

(8) INTERNATIONALLY ACTIVE INSURANCE GROUP. An insurance holding company system that incudes an insurer registered under Section 27-29-4 that meets all of the following criteria:

a. Premiums are written in at least three countries.

b. The percentage of gross premiums written outside the United States is at least 10 percent of the insurance holding company system's total gross written premiums.

c. Based on a three-year rolling average, the total assets of the insurance holding company system are at least fifty billion dollars ($50,000,000,000) or the total gross written premiums of the insurance holding company system are at least ten billion dollars ($10,000,000,000).

(9) PERSON. An individual, a corporation, a limited liability company, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, or any similar entity or any combination of the foregoing acting in concert, but shall not include any joint venture partnership exclusively engaged in owning, managing, leasing, or developing real or tangible personal property.

(10) SECURITYHOLDER. One who owns any security of such person, including common stock, preferred stock, debt obligations, and other security convertible into, or evidencing, the right to acquire any of the foregoing.

(11) SUBSIDIARY. An affiliate controlled by such person, directly or indirectly, through one or more intermediaries.

(12) VOTING SECURITY. The term shall include any security convertible into, or evidencing, a right to acquire a voting security.

(Acts 1973, No. 1042, p. 1636, §2; Acts 1982, No. 82-230, p. 280, §1; Acts 1994, No. 94-634, p. 1178, §2; Act 2014-324, p. 1151, §1; Act 2017-228, §1; Act 2019-97, §2.)

Last modified: May 3, 2021