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AL HB215
Bill
Status
5/26/2023
Primary Sponsor
Reed Ingram
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AI Summary
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Clarifies that motor vehicle value protection agreement insurance policies must specifically pay or reimburse provider obligations in the event the provider fails to perform contractual duties.
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Requires insurance providers to maintain either $15,000,000 in surplus and paid-in capital, or $10,000,000 with a net written premiums-to-surplus ratio not exceeding 3-to-1.
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Allows providers to meet obligations through one of three compliance methods: insurance policy coverage, maintaining a funded reserve account of at least 40 percent of gross consideration received with a financial security deposit of at least 5 percent (minimum $25,000), or maintaining $100,000,000 in net worth or stockholders' equity.
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Requires annual filing of audited financial statements, NAIC Annual Statements, and actuarial certifications with the Commissioner of Insurance.
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Becomes effective immediately upon passage and approval by the Governor.
Legislative Description
Relating to consumer credit financing in the sale or lease of motor vehicles; to amend Section 8-37A-4 of the Code of Alabama 1975, as added by Act 2022-179 of the 2022 Regular Session, relating to motor vehicle value protection agreements and the requirements of a provider of the agreements to insure performance of the obligations of the provider; to further clarify the requirements of an insurance policy maintained by the provider for this purpose.
Motor vehicle value protection agreements, insurance policy of provider required to insure payments of obligations of provider
Last Action
Read Second Time in Second House
5/31/2023