Section 27-7-1

Definitions.

For the purposes of this chapter, the following terms shall have the meanings respectively ascribed to them by this section:

(1) BUSINESS ENTITY. A corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.

(2) COMMISSIONER. The Alabama Commissioner of Insurance.

(3) HOME STATE. The District of Columbia and any state or territory of the United States in which an insurance producer maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance producer.

(4) INSURANCE. As defined in Section 27-1-2.

(5) INSURANCE PRODUCER or PRODUCER. A person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.

(6) INSURER. As defined in Section 27-1-2. For the purposes of this chapter, insurer shall also mean an insurance company licensed pursuant to Chapter 3, commencing with Section 27-3-1 of this title; a health care service plan licensed pursuant to Article 6, commencing with Section 10A-20-6.01 of Chapter 20 of Title 10A; a dental service corporation licensed pursuant to Article 12, commencing with Section 22-21-360 of Chapter 21 of Title 22; a health maintenance organization licensed pursuant to Chapter 21A, commencing with Section 27-21A-1 of this title; a mutual aid association licensed pursuant to Chapter 30, commencing with Section 27-30-1 of this title; a fraternal benefit society licensed pursuant to Chapter 34, commencing with Section 27-34-1 of this title; an automobile club or association licensed pursuant to Chapter 39, commencing with Section 27-39-1 of this title; and a legal service insurance corporation licensed pursuant to Chapter 43, commencing with Section 27-43-1 of this title.

(7) LICENSE. A document issued by the commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent, or inherent, in the holder to represent or commit an insurance carrier.

(8) LICENSEE. A producer or service representative licensed in accordance with this chapter; a reinsurance intermediary licensed in accordance with Chapter 5A; a managing general agent licensed in accordance with Chapter 6A; and a surplus line broker licensed in accordance with Chapter 10.

(9) LICENSEE PENALTIES. For a producer or service representative licensed in accordance with this chapter, the penalties set forth in Section 27-7-19; for a reinsurance intermediary licensed in accordance with Chapter 5A, the penalties set forth in Section 27-5A-11; for a managing general agent licensed in accordance with Chapter 6A, the penalties set forth in Section 27-6A-7; and for a surplus line broker licensed in accordance with Chapter 10, the penalties set forth in Section 27-10-32.

(10) LIFE LINES OF AUTHORITY. Any one or more of the following lines as defined in Section 27-7-14.1: Life; accident and health or sickness, also known as disability; and variable life and variable annuity products.

(11) LIMITED LINE CREDIT INSURANCE. Credit life, credit disability, credit property, credit unemployment, creditor-placed, also known as forced-placed, nonfiling, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection (GAP), family and medical leave insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the commissioner determines should be designated a form of limited line credit insurance.

(12) LIMITED LINE CREDIT INSURANCE PRODUCER. A person who sells, solicits, or negotiates one or more forms of limited line credit insurance coverage to individuals through a master, corporate, group, or individual policy.

(13) LIMITED LINES INSURANCE. Limited line credit insurance, insurance on rental vehicles as defined in Section 27-7-5.1, travel insurance as defined in Section 27-7-5.2, self-service storage facility insurance as defined in Section 27-7-5.3, crop insurance as defined in Section 27-7-14.1, portable electronics insurance as defined in Chapter 22A, and any other line of insurance that the commissioner deems necessary to recognize for the purposes of complying with subsection (e) of Section 27-7-28.

(14) LIMITED LINES PRODUCER. A person authorized by the commissioner to sell, solicit, or negotiate limited lines insurance.

(15) NAIC. The National Association of Insurance Commissioners.

(16) NEGOTIATE. The act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.

(17) PERSON. An individual or a business entity.

(18) PROPERTY LINES OF AUTHORITY. Any one or more of the following lines as defined in Section 27-7-14.1: Property; casualty; and personal lines.

(19) SELL. To exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.

(20) SERVICE REPRESENTATIVE. A natural person, other than an officer, manager, or managing general agent of the insurer, employed on salary or at an hourly rate by an insurer, managing general agent, or a captive producer to work for, with or through producers in selling, soliciting, or negotiating insurance in the insurer or in the insurers represented by the managing general agent or a captive producer, but only in the property lines of authority. Officers and salaried nonresident traveling representatives of a mutual insurer operating on the premium deposit plan or of a reciprocal insurer not using resident producers for the solicitation of business who inspect risks or solicit insurance in this state and who receive no commissions from the insurer shall be deemed also to be service representatives. A service representative shall otherwise qualify and be licensed as a service representative under this chapter, but shall not be required to take and pass an examination nor be a resident of Alabama if qualified as a service representative in the state of his or her domicile. The service representative must be appointed for each insurer or association of insurers represented and for each class of insurance handled by the insurer or insurers in this state.

(21) SOLICIT. Attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.

(22) TERMINATE. The cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance.

(23) UNIFORM BUSINESS ENTITY APPLICATION. The current version of the NAIC Uniform Business Entity Application for resident and nonresident business entities.

(24) UNIFORM APPLICATION. The current version of the NAIC Uniform Application for resident and nonresident producer licensing.

(Acts 1957, No. 530, p. 726, §2; Acts 1971, No. 407, p. 707, §§114-118.1; Acts 1988, No. 88-123, p. 159, §1, Act 2001-702, p. 1509, §1; Act 2006-294, p. 599, §1; Act 2012-312, p. 685, §1; Act 2013-213, p. 489, §2; Act 2018-455, §1.)