Section 27-31C-3 License to Provide Homeowners Insurance; Exemptions; Powers and Duties.

(a) An Alabama Coastal Captive Insurance Company, if permitted by its articles of incorporation or organization, operating agreements, or charter, may apply to the commissioner for a license to write homeowners insurance coverage as limited in Section 27-31B-3(a)(4) and as defined and limited in the standard real property and contents insurance forms as approved by the commissioner. (b) An Alabama Coastal Captive Insurance Company that qualified as an association captive under the provisions of Section 27-31B-8 is exempt from the requirement that the association be in existence for one year so long as the association is in good standing as an entity before becoming an owner of an Alabama Coastal Captive Insurance Company. (c) An Alabama Coastal Captive Insurance Company may write homeowners insurance coverage as limited in Section 27-31B-3(a)(4) and as limited to perils described in subsection (a) above. (d)(1) An Alabama Coastal Captive Insurance Company formed as a sponsored captive insurance company: a. Is exempt from the provisions of Section 27-31B-22(b)(9)a. that require that the business written by a sponsor captive insurance company, with respect to each protected cell, must be fronted by an insurance company licensed pursuant to the laws of a state. b. May create a protected cell as a legal person separate from the protected cell company and may organize a protected cell under any incorporation or organization option available under Section 27-31B-8, unless the commissioner finds such option is not feasible under Section 27-31C-5. c. May have as its sponsor an association formed to address coastal property and insurance issues. (2) An Alabama Coastal Captive Insurance Company may issue directly its own policies to the insureds. (e) Any Alabama Coastal Captive Insurance Company that otherwise qualifies for the limited exemption from the provisions of Section 27-31B-22(b)(9)a. pursuant to subsection (d)(1) and any Alabama Coastal Captive Insurance Company, regardless of form, that issues policies directly to the public shall comply with the following: (1) It shall not expose itself to loss on one risk in an amount exceeding 10 percent of its surplus to policyholders and any risk or portion of it which has been reinsured must be deducted in determining this limitation of risk; (2) It shall not have loss reserves in excess of five times its surplus to policyholders; (3) It shall not have net premiums written in excess of three times its surplus to policyholders and any risk or portion of it which has been reinsured must be deducted in determining this limitation of risk; and (4) It shall file quarterly and annual statements with the department in accordance with statutory accounting principles on forms and in the manner prescribed by Section 27-31B-9. (f) To conduct business in this state, an Alabama Coastal Captive Insurance Company shall: (1) Obtain from the commissioner a license authorizing it to conduct business as an Alabama Coastal Captive Insurance Company in this state; (2) Hold at least one meeting of its governing body each year in this state; (3) Maintain its principal place of business in this state; (4) Appoint a registered agent to accept service of process and act otherwise on its behalf in this state; and (5) Name the commissioner as the agent for the Alabama Coastal Captive Insurance Company upon whom process, notice, or demands may be served if a registered agent, with reasonable diligence, is not located and served. (g) Before receiving a license, an Alabama Coastal Captive Insurance Company shall file with the commissioner: (1) A certified copy of its organizational documents; (2) A statement under oath of its president and secretary or other persons considered appropriate by the commissioner showing its financial condition; and (3) Other documents required by the commissioner. (h) In addition to the information required by subsection (g), the applicant Alabama Coastal Captive Insurance Company shall file with the commissioner evidence of: (1) The amount and liquidity of its assets relative to the risk to be assumed; (2) The adequacy of the expertise, experience, and character of the person who manages it; (3) The overall soundness of its plan of operation; (4) The adequacy of loss prevention programs; (5) Other overall factors considered relevant by the commissioner in ascertaining if the proposed Alabama Coastal Captive Insurance Company is able to meet its policy obligations; (6) Any information required by Section 27-31B-8 specifically applicable to the form of the Alabama Coastal Captive Insurance Company, and fees prescribed by Section 27-31B-4 along with any other required fees. (i) Information submitted pursuant to this section is confidential as provided in Section 27-31B-3, except that information is discoverable by a party in a civil action or contested case to which the Alabama Coastal Captive Insurance Company that submitted the information is a party, upon finding by the court that: (1) The information may be discoverable by a party in a civil action or contested case to which the captive insurance company that submitted the information is a party; (2) The information sought is relevant and necessary for the furtherance of the action or case; (3) The information sought is unavailable from other non-confidential sources; and (4) A subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the commissioner.