Section 27-10-24

Licensing of surplus line brokers.

(a) Any person, while licensed as a resident insurance producer in this state for the property lines of authority and who is deemed by the commissioner to have had sufficient experience in the insurance business to be competent for the purpose may be licensed as a surplus line broker for the types and kinds of insurance that he or she as a resident producer is licensed to handle as follows:

(1) Application to the commissioner for the license shall be made on forms as designated and furnished by the commissioner.

(2) License fee in the amount stated in Section 27-4-2 shall be paid to the commissioner. The license shall expire on December 31 next after its issue.

(3) Prior to the issuance of the license, the applicant shall file with the commissioner, and thereafter for as long as any license remains in effect he or she shall keep in force and unimpaired, a bond in favor of the State of Alabama in the penal sum of at least fifty thousand dollars ($50,000), aggregate liability, with authorized corporate sureties approved by the commissioner. The amount of the bond may be increased if deemed necessary by the commissioner, considering the amount of surplus lines tax paid in previous years. The bond shall be conditioned that the broker will conduct business under the license in accordance with the provisions of the surplus line insurance law and that he or she will promptly remit the taxes as provided by the law. No bond shall be terminated unless at least 30 days' prior written notice thereof is given to the broker and the commissioner.

(b) A business entity acting as a surplus line broker shall designate each licensed individual producer acting under the license, each of whom shall be responsible for the business entity's compliance with the insurance laws, rules, and regulations of this state. A separate fee shall be paid for each individual producer acting under a business entity license as surplus line broker, as set forth in Section 27-4-2.

(c)(1) Each licensed nonresident surplus line broker shall be considered to have performed acts equivalent to and constituting an appointment of the commissioner as his or her attorney to receive service of legal process issued against the nonresident in this state upon causes of action arising within this state out of transactions under the nonresident's surplus line broker license. Service upon the commissioner as such attorney shall constitute effective legal service upon the nonresident.

(2) The appointment shall be irrevocable for as long as there may be any such cause of action in this state against the nonresident.

(3) Service of process under this section shall be made by leaving three copies of the summons and complaint, or other process, with the commissioner, along with payment of the fee prescribed in Section 27-4-2, and the service shall be sufficient service upon the nonresident if notice of the service and a copy of the summons and complaint or other process are sent by registered or certified mail to the defendant by the commissioner; and the defendant's return and the certificate of the commissioner certifying compliance herewith shall be filed in the office of the clerk of court, or in the court or tribunal wherein the action is pending. The certificate of the commissioner shall show the date of the mailing by registered or certified mail of the notice of the service and copy of the summons and complaint, or other process, to the nonresident defendant and the date of the receipt of the return card and shall be signed by the commissioner. The commissioner may give the nonresident defendant notice of the service upon him or her, in lieu of the notice of service provided for herein to be given by registered or certified mail, in the following manner:

a. By having a notice of service and a copy of the summons and complaint, or other process, served upon the nonresident defendant, if found within the State of Alabama, by any officer duly qualified to serve legal process within the State of Alabama or, if the nonresident defendant is found to be outside of the State of Alabama, by a sheriff, deputy sheriff, or United States marshal or deputy United States marshal, or any duly constituted officer qualified to serve like process in the state or the jurisdiction where the nonresident defendant is found.

b. The officer's return showing service, when made, shall be filed in the office of the clerk of the court, or in the court or tribunal wherein the action is pending, on or before the return day of the process or as the court or tribunal may allow, and the court or tribunal in which the action is pending may order a continuance, or continuances, as may be necessary to afford the nonresident defendant reasonable opportunity to defend the action.

(4) The commissioner shall keep on file for a period of not less than three years a copy of the summons and complaint or other process served upon the commissioner, together with a record of all such process and of the day, hour, and manner of service.

(Acts 1963, No. 521, p. 1112, §11; Acts 1971, No. 407, p. 707, §199; Acts 1994, 1st Ex. Sess., No. 94-790, p. 92, §2; Act 2001-702, p. 1509, §15.)