The Legislature declares its concern that insurers not licensed to transact the business of insurance in this state are soliciting the sale of insurance and selling insurance to residents of this state, thus presenting the commissioner with the problem of resorting to courts of foreign jurisdictions for the purposes of enforcing the insurance laws of this state for the protection of its residents. It is the purpose of this unauthorized insurers law to make it unlawful for insurers that are not licensed to transact the business of insurance in this state and to subject said insurers to the jurisdiction of the courts of this state in actions or proceedings brought by the commissioner in transactions involving unauthorized insurers or for the protection of insureds and claimants residing in this state and for the protection of the public. This chapter constitutes and may be referred to as the 'Unauthorized Insurers Law.'
It shall be unlawful for any insurer to transact the business of insurance in this state or to enter into a contract for insurance in this state without first obtaining a license or certificate of authority from the commissioner. This unauthorized insurers law shall not apply to:
(1) Contracts of insurance procured pursuant to the surplus line insurance law;
(2) Transactions in this state involving contracts of insurance lawfully entered into, written and the policy delivered outside of this state covering subjects of insurance not resident, located or expressly to be performed in this state at the time of issuance and transactions subsequent to the making of such contract and the issuance of such policy;
(3) Reinsurance contracts;
(4) Transactions in this state involving group or blanket insurance and group annuities where the master policy or contract was lawfully issued and delivered in a state in which the insurer was authorized to transact business;
(5) Transportation insurance;
(6) Insurance on property or operation of railroads engaged in interstate commerce;
(7) Insurance of aircraft owned or operated by manufacturers of aircraft or aircraft operated in scheduled interstate flight or cargo of such aircraft or against liability, other than workmen's compensation and the employer's liability, arising out of the ownership, maintenance or use of such aircraft;
(8) The property and operations of shipbuilding and ship repair industry engaged in interstate or foreign commerce and vessels, cargoes, watercraft, piers, wharves, graving docks, dry docks, marine railways and building ways, commonly known as wet marine;
(9) Transactions in this state involving a policy or contract of insurance issued prior to 60 days after the effective date of this title; or
(10) Contracts of insurance issued to an industrial insured, defined as an insured:
a. Which procures the insurance of any risk by use or services of a full-time employee acting as an insurance manager or buyer or the services of a regularly and continuously retained, qualified insurance consultant;
b. Whose aggregate annual premiums for insurance on all risks other than workmen's compensation and group insurance, total at least $25,000.00; and
c. Which has at least 25 employees.
Any of the following occurrences or acts in this state, whether effected by mail or otherwise, by an insurer not licensed to do business in this state shall be included among those occurrences and acts deemed to constitute the transacting of the business of insurance in this state:
(1) The issuance or delivery of contracts or policies of insurance covering subjects resident, located or expressly to be performed in this state;
(2) The solicitation of applications for such insurance;
(3) The collection of premiums, membership fees, assessments or other considerations for such insurance; or
(4) The transacting of matters subsequent to the execution of such contracts and arising out of them or concerning them.
Whenever the commissioner believes, from evidence satisfactory to him, that any insurer is violating or not complying with the provisions of this unauthorized insurers law, the commissioner may, and is hereby empowered to, bring an action or proceeding against such insurer in the Circuit Court of Montgomery County, Alabama, to enjoin or restrain such violation or continuing noncompliance or the engaging therein or doing of any act in furtherance of such violation. The Circuit Court of Montgomery County, Alabama shall have jurisdiction of the proceedings and shall have the power and authority to make and enter such order or judgment as to such court shall be deemed proper.
(a) Any insurer not qualified under the laws of this state to transact the business of insurance as evidenced by a license or certificate of authority from the Commissioner of Insurance which shall transact, or attempt to transact, the business of insurance in this state or which shall do, or attempt to do, any of the acts and occurrences set out in Section 27-11-3 shall, by the doing of such business or the performing or attempting to perform any of such acts, be deemed to have appointed the Secretary of State, or his successor or successors in office, to be the true and lawful attorney or agent of such insurer whom process may be served in any action accrued or accruing from the transacting of such business or the performing of such act by any such insurer, or by its agent, servant or employee. Service of such process shall be made by serving three copies of the process on the said Secretary of State, and such service shall be sufficient service upon the said insurer, provided, that notice of such service and a copy of the process are forthwith sent by registered or certified mail by the Secretary of State to the defendant at its last known address, which shall be stated in the affidavit of the plaintiff or complainant, marked 'deliver to addressee only' and 'return receipt requested,' and provided, further, that such return receipt shall be received by the Secretary of State purporting to have been signed by said insurer, or the Secretary of State shall be advised by the postal authority that delivery of said registered or certified mail was refused by said insurer; and the date on which the Secretary of State receives said return receipt, or advice by the postal authority that delivery of said registered or certified mail was refused shall be treated and considered as the date of service of process on said insurer. The Secretary of State shall make an affidavit as to the service of said process on him, and as to his mailing a copy of the same and notice of such service to the insurer and as to the receipt of said return receipt, or advice of the refusal of said registered or certified mail, and the respective dates thereof, and shall attach said affidavit, return receipt or advice from the postal authority to a copy of the process and shall return the same to the clerk or register who issued the same, and all of the same shall be filed in the action by the clerk or register. The commissioner, or his agent or attorney, desiring to obtain service upon an insurer under the provisions of this unauthorized insurers law shall make and file in the action an affidavit stating facts showing that this section is applicable and stating the last known address of the insurer, and the clerk or register of the court in which the action is filed shall attach a copy of the affidavit to the writ or process and a copy of the affidavit to each copy of the writ or process and forward the original writ or process and three copies thereof to the Sheriff of Montgomery County, Alabama, for service on the Secretary of State; and it shall be the duty of the sheriff to serve the same on the Secretary of State and to make due return of such service. The court in which the action is pending may order such continuance of the action as may be necessary to afford the defendant, or defendants, reasonable opportunity to make defense. Any insurer who was licensed to transact the business of insurance in this state at the time of the doing of business or the performing of the act complained of, but which is not so licensed or authorized at the time of the pendency of an action involving the transacting of the business of insurance or the act or occurrence complained of, shall be deemed to be an unauthorized insurer within the meaning of this chapter, and service of process under such circumstances may be had as provided in this section.
(b) Service of summons when obtained upon any such insurer as provided in subsection (a) of this section for the service of process shall be deemed sufficient service of summons and process to give to the Circuit Court of Montgomery County, Alabama, jurisdiction over the cause of action and over such insurer and shall warrant and authorize personal judgment against such defendant, or defendants, in the event that the plaintiff prevails in the action. There shall be paid to the Secretary of State for services under this section fees as may be provided for service of process on nonresidents doing business or performing work or service in this state.
The failure of an insurer to obtain a license or certificate of authority shall not impair the validity of any act or contract of such insurer and shall not prevent such insurer, its assigns or successors in interest, from defending any action in any court of this state; but no insurer transacting insurance business in this state without a license or certificate of authority shall be permitted to maintain an action in any court of this state to enforce any right, claim or demand arising out of the transaction of such business until such company, its assigns or successors in interest shall have:
(1) Obtained a license or certificate of authority; or
(2) Deposited with the clerk of the court in which such action or proceeding is pending cash or securities or file with such clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be entered in such action; provided, that the court may, in its discretion and after reasonable notice to the opposing parties and upon a hearing, make an order dispensing with such deposit or bond where the insurer makes a showing satisfactory to such court that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in such action or proceeding.
No action shall be maintained, except upon the conditions provided in this section, in any court of this state by any successor or assignee or assumptor of such unauthorized insurer which has acquired all or substantially all of the assets of such unauthorized insurer.
Any insurer which willfully violates the provisions of the unauthorized insurers law shall, upon proof thereof, forfeit and pay to the State of Alabama a sum of not less than $50.00 and not more than $500.00 for each offense, which may be recovered in a civil action brought by the commissioner under the provision of this unauthorized insurers law.