Ala. Code § 27-44-5

Current through the 2024 Regular Session.

Section 27-44-5 - Definitions

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) ACCOUNT. Either of the three accounts created under Section 27-44-6.

(2) ASSOCIATION. The Alabama Life and Disability Insurance Guaranty Association created under Section 27-44-6.

(3) AUTHORIZED ASSESSMENT or the term AUTHORIZED when used in the context of assessments. A resolution by the board of directors has been passed whereby an assessment will be called immediately or in the future from member insurers for a specified amount. An assessment is authorized when the resolution is passed.

(4) BENEFIT PLAN. A specific employee, union, or association of natural persons benefit plan.

(5) CALLED ASSESSMENT or the term CALLED when used in the context of assessments. A notice that has been issued by the association to member insurers requiring that an authorized assessment be paid within the time frame set forth within the notice. An authorized assessment becomes a called assessment when notice is mailed by the association to member insurers.

(6) COMMISSIONER. The Commissioner of Insurance of this state.

(7) CONTRACTUAL OBLIGATION. An obligation under a policy or contract, or certificate under a group policy or contract, or portion thereof for which coverage is provided under Section 27-44-3.

(8) COVERED POLICY. A policy or contract or portion of a policy or contract for which coverage is provided under Section 27-44-3.

(9) IMPAIRED INSURER. A member insurer which, after January 1, 2013, is not an insolvent insurer and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction.

(10) INSOLVENT INSURER. A member insurer which, after January 1, 2013, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.

(11) MEMBER INSURER. An insurer licensed or that holds a certificate of authority to transact in this state any kind of insurance for which coverage is provided under Section 27-44-3, and includes an insurer whose license or certificate of authority in this state may have been suspended, revoked, not renewed, or voluntarily withdrawn, but does not include any of the following:

a. A hospital or medical service organization, whether profit or non-profit.

b. A health care services plan.

c. A cooperative hospital association.

d. A health maintenance organization.

e. A fraternal benefit society.

f. A mandatory state pooling plan.

g. A mutual assessment company or other person that operates on an assessment basis.

h. An insurance exchange.

i. An organization that has a certificate or license limited to the issuance of charitable gift annuities.

j. An entity substantially similar to any of the above.

(12) MOODY'S CORPORATE BOND YIELD AVERAGE. The Monthly Average Corporates as published by Moody's Investors Service, Inc., or any successor thereto.

(13) OWNER of a policy or contract and POLICY OWNER and CONTRACT OWNER. The person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the insurer. For policies or contracts which do not contractually provide for the designation of an owner, the owner shall be deemed to be the person who has the right to exercise the traditional incidents of ownership of a policy or contract. The terms owner, contract owner, and policy owner do not include person with a mere beneficial interest in a policy or contract.

(14) PERSON. An individual, corporation, limited liability company, partnership, association, governmental body or entity, or voluntary organization.

(15) PREMIUMS. Direct gross insurance premiums and annuity considerations received on covered policies or contracts, less returned premiums and considerations thereon and dividends paid or credited to policyholders on such direct business. "Premiums" do not include premiums and considerations on contracts between insurers and reinsurers.

(16) PRINCIPAL PLACE OF BUSINESS. When referring to a person other than a natural person, the single state in which the natural persons who establish policy for the direction, control, and coordination of the operations of the entity as a whole primarily exercise that function, determined by the association in its reasonable judgment by considering the following factors:

a. The state in which the primary executive and administrative headquarters of the entity is located.

b. The state in which the principal office of the chief executive officer of the entity is located.

c. The state in which the board of directors, or similar governing person or persons, of the entity conducts the majority of its meetings.

d. The state in which the executive or management committee of the board of directors, or similar governing person or persons, of the entity conducts the majority of its meetings.

e. The state from which the management of the overall operations of the entity is directed.

f. In the case of a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the above factors.

(17) RECEIVERSHIP COURT. The court in the insolvent or impaired insurer's state having jurisdiction over the conservation, rehabilitation, or liquidation of the insurer.

(18) RESIDENT. A person who resides in this state on the date of entry of a court order that determines a member insurer to be an impaired or insolvent insurer and to whom a contractual obligation is owed. A person may be a resident of only one state, which in the case of a person other than a natural person shall be its principal place of business. Citizens of the United States that are either (i) residents of foreign countries or (ii) residents of United States possessions, territories, or protectorates that do not have an association similar to the association created by this chapter, shall be deemed residents of the state of domicile of the insurer that issued the policies or contracts.

(19) STATE. A state, the District of Columbia, Puerto Rico, and a United States possession, territory, or protectorate.

(20) STRUCTURED SETTLEMENT ANNUITY. An annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant.

(21) SUPPLEMENTAL CONTRACT. A written agreement entered into for the distribution of proceeds under a life, disability, or annuity policy or contract.

(22) UNALLOCATED ANNUITY CONTRACT. An annuity contract or group annuity certificate which is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate.

Ala. Code § 27-44-5 (1975)

Amended by Act 2012-319,§ 1, eff. 1/1/2013.

Acts 1982, No. 82-561, p. 922, §5.