(a) A domestic mutual insurer may reinsure all, or substantially all, its business in force or all, or substantially all, of a major class thereof with another insurer, stock or mutual, by an agreement of bulk reinsurance after compliance with this section. No such agreement shall become effective unless filed with the commissioner and approved by him in writing after a hearing thereon.
lawyer at desk

Ask an insurance law question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

Terms Used In Alabama Code 27-27-48

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • writing: includes typewriting and printing on paper. See Alabama Code 1-1-1
  • year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
(b) The commissioner shall approve such agreement within a reasonable time after filing if he finds it to be fair and equitable to each domestic insurer involved, and that such reinsurance if effectuated would not substantially reduce the protection or service to its policyholders. If the commissioner does not so approve, he shall so notify each insurer involved in writing, specifying his reasons therefor.
(c) The plan and agreement for such reinsurance must be approved by vote of not less than two-thirds of each domestic mutual insurer’s members voting thereon at meetings of members called for the purpose, pursuant to such reasonable notice and procedure as the commissioner may approve. If a life insurer, right to vote may be limited to members whose policies are other than term or group policies and have been in effect for more than one year.
(d) If for reinsurance of a mutual insurer in a stock insurer, the agreement must provide for payment in cash to each member of the insurer entitled thereto, as upon conversion of such insurer pursuant to Section 27-27-44, of his equity in the business reinsured as determined under a fair formula approved by the commissioner, which equity shall be based upon such member’s equity in the reserves, assets, whether or not “admitted” assets, and surplus, if any, of the mutual insurer to be taken over by the stock insurer.
  Previous section
Next section  
 Chapter 27 Contents