No person shall cause or permit to be made, issued, or circulated in any form:

(1) Any misrepresentation or false or misleading statement concerning the terms, benefits, or advantages of any fraternal insurance contract now issued, or to be issued, in this state or the financial condition of any society;

Attorney's Note

Under the Alabama Code, punishments for crimes depend on the classification. In the case of this section:
ClassPrisonFine
Violationup to 30 daysup to $200
For details, see Ala. Code § 13A-5-7
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Terms Used In Alabama Code 27-34-45

  • Contract: A legal written agreement that becomes binding when signed.
  • Conviction: A judgement of guilt against a criminal defendant.
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
(2) Any false or misleading estimate or statement concerning the dividends or shares of surplus paid, or to be paid, by any society on any insurance contract; or
(3) Any incomplete comparison of an insurance contract of one society with an insurance contract of another society or insurer for the purpose of inducing the lapse, forfeiture, or surrender of any insurance contract. A comparison of insurance contracts is incomplete:

a. If it does not compare in detail:

1. The gross rates and the gross rates less any dividend or other reduction allowed at the date of the comparison; and
2. Any increase in cash values and all the benefits provided by each contract for the possible duration thereof as determined by the life expectancy of the insured; or
b. If it omits from consideration:

1. Any benefit or value provided in the contract;
2. Any differences as to amount or period of rates; or
3. Any differences in limitations or conditions or provisions which directly or indirectly affect the benefits.

In any determination of the incompleteness or misleading character of any comparison or statement, it shall be presumed that the insured had no knowledge of any of the contents of the contract involved.

(4) Any person who violates any provision of this section or knowingly receives any compensation or commission by or in consequence of such violation shall, upon conviction, be punished by a fine not less than $100.00 nor more than $1,000.00 or by imprisonment in the county jail not less than 30 days nor more than 90 days, or by both fine and imprisonment, and shall, in addition, be liable for a civil penalty in the amount of three times the sum received by such violator as compensation or commission, which penalty an action may be maintained for and recovered by any person or society aggrieved for his, or its, own use and benefit in accordance with the provisions of civil practice.
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