Code of Alabama - Title 27: Insurance - Chapter 42 - Insurance Guaranty Association

• Section 27-42-1 Short title
  This chapter shall be known and may be cited as the "Alabama Insurance Guaranty Association Act."
• Section 27-42-2 Purpose of chapter
  The purpose of this chapter is to provide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay in...
• Section 27-42-3 Applicability of chapter
  This chapter shall apply to all kinds of direct insurance, excluding all of the following: (1) Life, annuity, health, or disability insurance. (2) Mortgage guaranty,...
• Section 27-42-4 Construction of chapter
  This chapter shall be liberally construed to effect the purpose under Section 27-42-2 which will constitute an aid and guide to interpretation.
• Section 27-42-5 Definitions
  As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise: (1) ACCOUNT. Any one of...
• Section 27-42-6 Association created; member insurers; accounts
  There is created a nonprofit unincorporated legal entity to be known as the Alabama Insurance Guaranty Association. All insurers defined as member insurers in subdivision...
• Section 27-42-7 Board of directors; selection; vacancies; expenses
  (a) The board of directors of the association shall consist of not less than five nor more than nine persons serving terms as established in...
• Section 27-42-8 Powers and duties
  (a) The association shall: (1)a. Be obligated to pay covered claims existing prior to the order of liquidation arising within 30 days after the order...
• Section 27-42-8.1 Maximum assessment
  (a) Notwithstanding the one percent maximum assessment set forth in subdivision (3) of subsection (a) of Section 27-42-8, no member insurer may be assessed in...
• Section 27-42-9 Plan of operation
  (a) The association shall submit to the commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and...
• Section 27-42-10 Duties and powers of the commissioner; judicial review
  (a) The commissioner shall: (1) Notify the association of the existence of an insolvent insurer not later than three days after he receives notice of...
• Section 27-42-11 Settlement and payment of claims; recovery
  (a) Any person recovering under this chapter shall be deemed to have assigned his or her rights under the policy to the association to the...
• Section 27-42-12 Exhaustion of rights; nonduplication of recovery
  (a) Any person having a claim under an insurance policy, whether or not it is a policy issued by a member insurer, where the claim...
• Section 27-42-13 Prevention of insolvencies; examinations of insurers; reports
  (a) To aid in the detection and prevention of insurer insolvencies, it shall be the duty of the board of directors, upon majority vote, to...
• Section 27-42-14 Examination of the association; financial report
  The association shall be subject to examination and regulation by the commissioner. The board of directors shall submit, not later than March 30 of each...
• Section 27-42-15 Tax exemption
  The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions except taxes levied...
• Section 27-42-16 Credits for assessments paid; disposition of refunds previously offset
  (a) A member insurer may offset against its premium tax liability to this state an assessment described in subdivision (3) of subsection (a) of Section...
• Section 27-42-17 Immunity
  There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the association...
• Section 27-42-18 Stay of proceedings; access of board to records of insurers
  All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this state shall be...
• Section 27-42-19 Association, policyholders, beneficiaries, and insureds to have preferred creditor status
  Upon the issuance of a proper court order placing a domestic insurer in receivership or placing a foreign insurer in ancillary receivership for rehabilitation or...
• Section 27-42-20 Access to assets of insolvent insurer; application for court approval of plan to disburse assets; notice of application
  (a) Within 120 days of a final determination of insolvency of an insurance company by a court of competent jurisdiction the receiver shall make application...

Last modified: May 3, 2021