Alabama Department of Insurance

On February 18, 2022, the Alabama Department of Insurance celebrated 125 years of insurance regulation. The timeline below recounts several milestones along the way.

• First Alabama statute dealing with insurance - a general revenue act imposing a 0.5% tax on premiums written in the state by any insurer.

• Insurers from other states required to obtain a certificate of authority from the State Comptroller. “Auditor” and “Comptroller” are considered synonymous and used to designate one and the same officer.

• At the second meeting of what is now called the National Association of Insurance Commissioners, R. M. Reynolds, state auditor, represents Alabama.

• Life Insurers from other states required to annually file a sworn statement of their financial condition with the State Auditor.

• Insurers from other states required to receive a certificate of authority from the Auditor and to pay a 1% premium tax on business in this state.

• All insurers doing business in this state required to have a minimum of $100,000 capital in cash.
  
  Insurers from other states required to pay a “uniform license tax” of $100 per year.

• First comprehensive act to regulate the business of insurance in this state, with the Secretary of State serving as Insurance Commissioner ex officio; requires biennial examination of domestic insurers. Frank Newsum Julian served a total of eighteen years and 5 months as the head of the state’s insurance regulatory agency, as follows: four year term as Secretary of State, ex officio Insurance Commissioner from 1907 to 1911; appointed Commissioner of Insurance/Superintendent of Insurance by Gov. William W. Brandon from 1923 to 1927; and Superintendent of Insurance under Governors Bibb Graves, Frank M. Dixon, and Chauncey Sparks from 1935 until his death on November 30, 1944.
  
  

• First fire marshal act, with administration placed in the Department of Insurance. The act also imposes a premium tax of 1/5 of 1% on fire insurers. The first Alabama state fire marshal was Lorrie Rice, who served from 1909 until 1913. His annual salary was set by statute at $2,000.
  
  

• Fire Marshal Law revised.

• First “Fire Prevention Day in Alabama” proclaimed by governor.

• Completely “separate and distinct” department created as the Department of Insurance, with the Commissioner of Insurance appointed by the Governor; offices to be in state Capitol building.

• Office of State Fire Marshal is created and established separate from the Department of Insurance. The fire insurance premium tax is increased to 2/5 of 1% to fund the office.

• In lieu of the Department of Insurance, the Bureau of Insurance is created with the "Superintendent of Insurance” appointed by the Governor.

• Insurance agents required to be licensed.

• Superintendent of Insurance becomes State Fire Marshal Ex-Officio, Office of State Fire Marshal is consolidated with the Bureau of Insurance.

• Bureau of Insurance becomes a division of the new Department of Commerce, along with the Bureau of Banking and the Bureau of Building and Loan.

• Triennial examination of domestic insurers required.

• Rehabilitation, reorganization and liquidation of insurers doing business in more than one state.

• Addie Lee Farish, Alabama’s Director of Commerce, becomes the first female to serve as the chief insurance regulator in the nation.
  
  

• Bureau of Rates created.

• The Department of Insurance again becomes a separate state agency; Attorney General to render legal services.

• Special examination revolving fund created.

• Property and casualty insurance agent prelicensing examination required.

• Trade Practices Act adopted.
  
  Life and health insurance agent prelicensing examination required.
  
  

• Unauthorized Insurers Act approved; surplus line brokers to be licensed.

• First “Alabama Insurance Code.” The title of the chief officer is changed to Commissioner of Insurance; adjusters to be licensed; Attorney general to assign assistant attorney general to render legal services; provides for rehabilitation, reorganization, conservation and liquidation of all insurers; provides standard nonforfeiture law and standard valuation law for life insurance.

• Alabama Insurance Holding Company System Regulatory Act.

• Creation of Receivership Division, Chief of Receivership Division to serve as Receiver of impaired or insolvent insurers.
  
  State Fire Marshal and deputies are granted full powers of peace officers.

• Investments Act, initially applicable only to domestic life, disability and burial insurance companies.

• Property and casualty insurance agents required to attend a forty-hour “pre-qualification course” before sitting for the written examination.

• Alabama Insurance Guaranty Association created; protects against property and casualty insurance insolvencies only.

• Life and disability insurance agents required to attend a forty-hour “pre-qualification course” before sitting for the written examination. This law also permitted partnerships and corporations to be licensed as life and disability insurance agents.

• Alabama Life and Disability Insurance Guaranty Association created; protects against life and disability insurance policies and annuity contracts by insolvent insurers.

• Department of Insurance moves to RSA Building, 135 South Union Street, Montgomery. Previously, the department was at 64 North Union Street, which was then known as the State Administrative Building, and is now known as the Folsom Building, which was built in 1958.

• Regulation of health maintenance organizations.

• Partnerships and corporations permitted to be licensed as property and casualty insurance agents. The act also required all agents to annually apply for license.

• Examinations of domestic insurers to be at least once every five years; investments act amended to apply to all domestic insurers and health maintenance organizations.
  
  
  Pictured behind Gov. Jim Folsom as he signs the accreditation bill are, from the left: Deputy Commissioner Mickey DeBellis, Commissioner Jimmy Dill, Rep. Steve Flowers, Sen. Walter Owens, Deputy Commissioner David Parsons, General Counsel Mike Bownes, and Associate Counsel Reyn Norman.

• Insurance Premium Tax Reform Act of 1993; gradually equalizes taxes paid by domestic and foreign life and health insurers from 1995 to 1999 at 2.3% and 1.6% respectively, and for most other insurers beginning in 1995 at 3.6%, with certain possible credits for office facilities and real property investments.

• Alabama Department of Insurance first obtains accreditation by the National Association of Insurance Commissioners.

• Insurance agents required to complete 12 hours of continuing education for annual renewal of license.

• Alabama Insurance Fund created, making Department of Insurance self-funded.

• Department of Insurance moves to 17th floor of RSA Tower, 201 Monroe Street, Montgomery.
  
  

• Alabama Department of Insurance receives a second round of accreditation by the National Association of Insurance Commissioners.

• Insurance agent and broker license consolidated to insurance producer license.

• Alabama Preneed Funeral and Cemetery Act adopted.

• Walter A. Bell becomes the first African-American to serve as Alabama’s Commissioner of Insurance.
  
  

• David Parsons, then Deputy Commissioner for Life & Health Insurance, was awarded the Robert Dineen Award by the NAIC. The award is designed to honor a staff member of an insurance department who has made an outstanding contribution to state regulation of insurance. Former Commissioner Parsons, the first Alabamian to receive the award in its 16-year history, was honored for his work on the development of the Interstate Compact.
  
  

• Alabama Commissioner of Insurance Walter Bell chosen as President-Elect of the National Association of Insurance Commissioner, to serve a one-year term as President beginning January 1, 2007. He becomes the first Alabama Commissioner to serve in this position.

• Insurance producer license becomes biennial.
  
  
  Pictured behind Gov. Bob Riley as he signs the producer licensing bill are, from the left: General Counsel Reyn Norman, Rep. Warren Beck, Rep. Craig Ford, and Chief of Staff Ragan Ingram.

• Adoption of Alabama Captive Insurers Act.
  
  
  Pictured behind Gov. Bob Riley as he signs the captive insurers bill are, from the left: Boyd Kelly, Sen. Bradley Byrne, Rep. Greg Albritton, General Counsel Reyn Norman, Conwell Hooper, Rep. Steve McMillan, and Chief of Staff Ragan Ingram.

• Alabama Department of Insurance is reaccredited by the National Association of Insurance Commissioners.

• Revisions to Alabama Insurance Guaranty Association law.

• Steve Ostlund, Alabama’s Actuary for Life & Health Insurance, was awarded the Robert Dineen Award by the NAIC. The award is designed to honor a staff member of an insurance department who has made an outstanding contribution to state regulation of insurance. Ostlund, the second Alabamian to receive the award in its 22-year history, was honored for his work on development of the medical loss ratio requirements to be used in connection with implementation of national health care reform.

• Strengthen Alabama Homes Act adopted.
  
  Interstate Insurance Product Regulation Compact approved.
  
  Independent adjuster law adopted.

• Alabama Department of Insurance is reaccredited by the National Association of Insurance Commissioners.

• Producer licensing uniformity bill approved, requires fingerprinting of insurance producers, independent adjusters, and title insurance agents.
  
  Insurance Fraud Unit established within the Department of Insurance, crime of insurance fraud created.
  
  Revisions to Alabama Life and Disability Insurance Guaranty Association law.
  
  
  Pictured behind Gov. Robert Bentley as he signs the ALDIGA bill are, from the left: Rep. Ken Johnson, Ragan Ingram, Tommy Treadwell, Barrie Stokes, Commissioner Jim Ridling, Reyn Norman, Dotty Still, Greg Erath, Mike Weeks, and Steve Still.

• Major revisions to the Alabama Preneed Funeral and Cemetery Act adopted.
  
  
  Picture behind Gov. Robert Bentley as he signs the preneed bill are, from the left: Graham Champion, Mark Fowler, Charles Angell, Taylor Benefield, Mac Stagner, Rep. Rod Scott, Mike Morrison, Sen. Pricilla Dunn, Commissioner Jim Ridling, Geoff Halbrooks, John Cook Rudder, Don Daniels, Rep. Juandalynn Gavin, Sen. Paul Bussman, Randy Matthews, Rep. K.L. Brown, and Mike McClanahan.

• Revisions to Alabama Captive Insurers Act.

• Adoption of Principle-Based Reserving for life insurance; new Standard Nonforfeiture Law for Life Insurance and new Standard Valuation Law.

• Alabama Department of Insurance is reaccredited by the National Association of Insurance Commissioners.

• Jim L. Ridling marks his thirteenth anniversary as Alabama’s Commissioner of Insurance. He is the longest serving Insurance Commissioner in Alabama history and is currently the longest serving appointed Insurance Commissioner in the nation.