SB97INTRODUCED
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SB97
1BE6L3L-1
By Senator Kitchens
RFD: Banking and Insurance
First Read: 05-Feb-25
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5 1BE6L3L-1 01/15/2025 FC (L)ma 2025-209
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First Read: 05-Feb-25
SYNOPSIS:
Under existing law, the Department of Insurance
licenses surplus line brokers. A nonresident may be
licensed as a surplus line broker for the same type of
insurance the broker is licensed to handle in the
nonresident's state.
Existing law requires an applicant for a
nonresident license to comply with the same
requirements as provided for a resident license which
includes an application, a license fee, and an
additional surety bond.
This bill would specify that the requirements
for licensure of a nonresident surplus line broker in
this state would include an application and a license
fee, but not an additional surety bond. This change is
proposed in order for Alabama to remain in conformance
with existing reciprocity provisions for the licensing
of nonresident insurance agents in this state.
A BILL
TO BE ENTITLED
AN ACT
Relating to the Department of Insurance and the
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Relating to the Department of Insurance and the
licensing of a nonresident surplus line broker; to amend
Section 27-10-24 of the Code of Alabama 1975, as amended by
Act 2024-71 of the 2024 Regular Session, to further specify
the requirements for licensure of nonresident surplus line
brokers.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 27-10-24 of the Code of Alabama
1975, as amended by Act 2024-71, is amended to read as
follows:
"ยง27-10-24
(a) Any person licensed as a resident insurance
producer in this state for the property and casualty lines of
authority and deemed by the commissioner sufficiently
experienced in the insurance business may be licensed as a
surplus line broker for the same types of insurance that he or
she is currently licensed to handle as follows:
(1) ApplicationAn application shall be made on forms
designated and furnished submitted on a form as required by
the commissioner.
(2) AThe license fee required by Section 27-4-2 shall
be paid to the commissioner. The license shall expire on
December 31 next after its issue.
(3) Prior to the issuance of the license, the applicant
shall file with the commissioner a bond in favor of the State
of Alabama in the penal sum of at least fifty thousand dollars
($50,000), aggregate liability, with authorized corporate
sureties approved by the commissioner to remain in force for
the duration of the license or any renewal. The amount of the
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the duration of the license or any renewal. The amount of the
bond may be increased if deemed necessary by the commissioner,
considering the amount of surplus lines tax line taxes paid in
previous years. The bond shall be conditioned that the broker
will conduct business under the license in accordance with the
provisions of the surplus line insurance law and will promptly
remit the taxes as provided by the law. No bond shall be
terminated unless at least 30 days' prior written notice is
given to the broker and the commissioner.
(b) A business entity acting as a surplus line broker
shall designate each licensed individual producer acting under
the license, each of whom shall be responsible for the
business entity's compliance with the insurance laws, rules,
and regulations of this state. A separate fee shall be paid
for each individual producer acting under a business entity
license as surplus line broker, as in Section 27-4-2.
(c) A nonresident person may be licensed as a surplus
line broker for the same types of insurance that he or she is
currently licensed in good standing to handle in his or her
domiciled state, as follows:
(1) The nonresident shall comply with the requirements
established in subsection (a).
(1) An application shall be submitted on a form as
required by the commissioner.
(2) The license fee required by Section 27-4-2 shall be
paid to the commissioner. The license shall expire on December
31 next after its issue.
(2)(3) Each licensed nonresident surplus line broker
shall be considered to have performed acts equivalent to and
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shall be considered to have performed acts equivalent to and
constituting an appointment of the commissioner to receive
service of legal process issued against the nonresident in
this state upon causes of action arising within this state out
of transactions under the nonresident's surplus line broker
license. Service upon the commissioner shall constitute
effective legal service upon the nonresident.
(3)(4) The appointment shall be irrevocable for as long
as there may be any such cause of action in this state against
the nonresident.
(4)(5) Service of process under this section shall be
made by leaving three copies of the summons and complaint, or
other process, with the commissioner, along with payment of
the fee prescribed in Section 27-4-2, and the service shall be
sufficient service upon the nonresident if notice of the
service and a copy of the summons and complaint or other
process are sent by registered or certified mail to the
defendant by the commissioner. The defendant's return and the
certificate of the commissioner certifying compliance herewith
shall be filed in the office of the clerk of court, or in the
court or tribunal wherein the action is pending. The
certificate of the commissioner shall show the date of the
mailing by registered or certified mail of the notice of the
service and copy of the summons and complaint, or other
process, to the nonresident defendant and the date of the
receipt of the return card and shall be signed by the
commissioner. The commissioner may give the nonresident
defendant notice of the service upon him or her, in lieu of
the notice of service provided for herein to be given in this
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the notice of service provided for herein to be given in this
subdivision by registered or certified mail, in the following
manner:
a. By having a notice of service and a copy of the
summons and complaint, or other process, served upon the
nonresident defendant, if found within the State of Alabama,
by any officer duly qualified to serve legal process within
the State of Alabama or, if the nonresident defendant is found
to be outside of the State of Alabama, by a sheriff, deputy
sheriff, or United States marshal or deputy United States
marshal, or any duly constituted officer qualified to serve
like process in the state or the jurisdiction where the
nonresident defendant is found.
b. The officer's return showing service, when made,
shall be filed in the office of the clerk of the court, or in
the court or tribunal wherein the action is pending, on or
before the return day of the process or as the court or
tribunal may allow, and the court or tribunal in which the
action is pending may order a continuance, or continuances, as
may be necessary to afford the nonresident defendant
reasonable opportunity to defend the action.
(5)(6) The commissioner shall keep on file for a period
of not less than three years a copy of the summons and
complaint or other process served upon the commissioner,
together with a record of all such process and of the day,
hour, and manner of service."
Section 2. This act shall become effective immediately.
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