SB149 By Senator Blackwell RFD Banking and Insurance Rd 1 05-MAR-15

SYNOPSIS: Under existing law, all surety insurers are required to post an unearned premium reserve in the same manner as property and general casualty insurers.

This bill would provide a specific unearned premium reserve for bail bond surety insurers as an alternative to the general requirements for other surety insurers.

A BILL TO BE ENTITLED AN ACT

Relating to insurance; to provide for the unearned premium reserve for bail bond surety insurers; and for this purpose to add Section 27-36-3.1 to the Code of Alabama 1975.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Section 27-36-3.1 is added to the Code of Alabama 1975, to read as follows:

§27-36-3.1.

In lieu of the unearned premium reserve required in Section 27-36-3, the Commissioner of Insurance may require any surety insurer or limited insurer to set up and maintain a reserve on all bail bonds or other single-premium bonds without a definite expiration date, furnished in judicial proceedings, equal to the lesser of 35 percent of the bail premiums in force or seven dollars ($7) per one thousand dollars ($1,000) of bail liability. This reserve shall be reported as a liability in financial statements required to be filed with the commissioner. Each insurer shall file a supplementary schedule showing bail premiums in force and bail liability and the associated special reserve for bail and judicial bonds with financial statements required by Section 27-3-26. Bail premiums in force do not include amounts retained by licensed bail bond agents or licensed managing general agents, but may not be less than 6.5 percent of the total consideration received for all bail bonds in force.

Section 2. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Insurance

Insurance Department

Bail Bonds