Bulletins - Year 2003

DATE: November 21, 2003
RE: Annuity Disclosure Regulation, Chapter 482-1-129
TO: All Life and Health Insurers Marketing Annuity Products in the State of Alabama

It has come to my attention that when the new Alabama Insurance Department's Annuity Disclosure Regulation, Chapter 482-1-129, was promulgated, the effective date of October 11, 2003, did not leave enough time for the insurance companies to implement its provisions.

Therefore, the new effective date for Chapter 482-1-129 is March 31, 2004.

DATE: April 30, 2003
RE: Property & Casualty Policy and Billing Procedure
TO: All Property & Casualty Insurers Licensed in Alabama

Effective June 1, 2003, the minimum fee charged for examination of all property and casualty rates, rules and forms required to be submitted for approval is to be transmitted to the Property & Casualty Division, and this fee must accompany the filing.

Listed below are the minimum fees to be submitted as required above:

Type of Filing Minimum Fee
Any property, casualty, marine and surety RATE filing $75.00
Any property, casualty, marine and surety RULE filing $75.00
Any COMBINATION RATE and RULE filing $75.00
Any property, casualty, wet marine, marine and title FORM filing (per form) $40.00
Risk Retention Group and Purchasing Group Annual Registration $100.00

There is a maximum fee of $3,500.00 for all filings submitted at one time.

EXCEPTIONS TO FILING FEES: Special rated risks, "A" rated filing, non-adoption of rating organization filings, rating organization membership filings and responses to pending filings.


The required fee should be transmitted by draft payable to the Commissioner of Insurance, State of Alabama. If there are expenses over and above the minimum fees in examination of these filings, the insurer will be notified.

This change in the schedule of minimum fees becomes effective on all submissions received in the Department on and after June 1, 2003. The previous schedule of charges is reflected in the Bulletin dated November 1, 1995, which is hereby rescinded and withdrawn effective June 1, 2003.

DATE: January 17, 2003
RE: Bad Check Charges
TO: All Insurers Licensed in Alabama

"Premiums" are defined in the Insurance Code, for premium tax purposes, as "[a]ll amounts received in cash or otherwise on risks in this state as consideration for contracts of insurance...." Section 27-4A-2(8), Code of Alabama 1975. For purposes of fire and marine insurance rate approval, premium is "[t]he consideration paid, or to be paid, to an insurer for the issuance and delivery of any binder or policy of insurance." Section 27-13-20(2), Code of Alabama 1975. Likewise, for purposes of casualty and surety insurance rate approval, premium is "[t]he consideration paid or to be paid to an insurer for the issuance and delivery of any binder or policy of insurance." Section 27-13-60(2), Code of Alabama 1975.

The "bad check charge" authorized by Section 8-8-15 is a type of debt or obligation created by that statute. It does not exist separate and apart from the statute. It is not, therefore, an insurance premium or any other sort of charge for or arising from insurance sales. It is a charge that arises from a dishonored negotiable instrument and a specific code section. This position is bolstered by the concluding sentence in Section 8-8-15, which reads as follows: "Charges imposed in connection with the dishonor of a negotiable instrument shall not be deemed interest finance or other charge made as an incident to or as a condition to the grant of the loan or other extension of credit and shall not be included in determining the limit on charges which may be made in connection with the loan or extension of credit as provided in this section or in any other law of this state."

Therefore, based on these definitions, premium is not inclusive of the "bad check charge" imposed in connection with the dishonor of a negotiable instrument pursuant to Section 8-8-15, Code of Alabama 1975, and thus is not subject to insurance premium tax imposed in Section 27-4A-3 nor the rate approval requirements of Chapter 13 of Title 27, Code of Alabama 1975. All insurance companies are therefore permitted to assess a "bad check charge" pursuant to Section 8-8-15, since this is not a charge or insurance, and in so doing will not violate Section 27-12-17, Code of Alabama 1975, even if the "bad check charge" is not specified in the policy or rate classification filing.