Ala. Code
Code of Alabama

Ala. Code § 27-3-4 (2026)

Authority to Transact Insurance - Eligibility.

✓ official Alabama Legislature (ALISON) text, laws through the 2026 Regular Session
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To qualify for and hold authority to transact insurance in this state, an insurer must be otherwise in compliance with this title and with its charter powers and must be an incorporated stock insurer or an incorporated mutual insurer or a reciprocal insurer, all of the same general type as may be formed as a domestic insurer under this title; except that:

(1) No foreign insurer shall be authorized to transact insurance in this state which does not maintain reserves as required by Chapter 36 of this title applicable to the kind, or kinds, of insurance transacted by such insurer, wherever transacted in the United States, or which transacts insurance in the United States on the assessment premium plan, stipulated premium plan, cooperative plan, or any similar plan;

(2) Any foreign insurer which has transacted insurance as an authorized insurer in its state or country of domicile for less than five years shall not be authorized to transact insurance in this state unless it is otherwise qualified for such authority under this code and is:

a. The wholly owned subsidiary of an insurer authorized to transact insurance in this state;

b. The continuing corporation resulting from a merger or consolidation of insurers at least one of which insurers has been an authorized insurer in its state or country of domicile for at least five years; or

c. Is in compliance with the requirements as to capital and surplus provided therefor under Sections 27-3-7 and 27-3-8;

(3) The commissioner shall not grant or continue authority to transact insurance in this state as to any insurer the management of which is found by him, after thorough investigation, to be incompetent or untrustworthy, or so lacking in insurance company managerial experience as to make the proposed operation hazardous to the insurance-buying public or which, after thorough examination or investigation, he has good reason to believe is affiliated directly or indirectly through ownership, control, reinsurance transactions, or other insurance or business relations with any person, or persons, whose business operations are, or have been, marked to the injury of insurers, stockholders, policyholders, creditors, or the public by manipulation of assets, of accounts or of reinsurance or by bad faith;

(4) No insurer the voting control of which is held, in whole or substantial part, by any government or governmental agency shall be authorized to transact insurance in this state. Membership in a mutual insurer or subscribership in a reciprocal insurer shall not be deemed to be either an ownership or control of the insurer for the purposes of this subdivision; and

(5) Lloyd’s plan insurers may be authorized to transact insurance in this state as provided in Section 27-3-16.

(Acts 1971, No. 407, p. 707, §51.)

Notes of Decisions
Cited in 3 cases, 1996–2019 · leading case: Woodmen of the World Life Ins. Soc'y v. White, 35 F. Supp. 2d 1349 (M.D. Ala. 1999).
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Woodmen of the World Life Ins. Soc'y v. White, 35 F. Supp. 2d 1349 (M.D. Ala. 1999). “Section 27-3-4; and b. 27-3-5; (4) The following sections of chapter 10; a.”
Custard Ins. Adjusters v. Youngblood, 686 So. 2d 211 (Ala. 1996). “When Eyer applied for the policy, he knew that neither Fiduciary nor Myrtle Beach was authorized to transact insurance business in Alabama either as a foreign insurer complying with § 27-3-4 or as a surplus lines carrier. According to Eyer, he believed that the policy could be…”
Ogles v. Sec. Benefit Life Ins. Co., 401 F. Supp. 3d 1210 (D. Kan. 2019). “Code § 27-3-7 (setting minimum surplus requirements for foreign insurance companies doing business in Alabama); Ala. Code § 27-3-4 (setting reserve requirements for foreign insurance companies).”
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