Section 27-42-5

Definitions.

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) ACCOUNT. Any one of the three accounts created by Section 27-42-6.

(2) ASSOCIATION. The Alabama Insurance Guaranty Association created under Section 27-42-6.

(3) COMMISSIONER. The Commissioner of Insurance of the State of Alabama.

(4) COVERED CLAIM. An unpaid claim, including one of unearned premiums, which arises out of, and is within the coverage and not in excess of, the applicable limits of an insurance policy to which this chapter applies, issued by an insurer, if such insurer becomes an insolvent insurer after January 1, 1981, and (i) the claimant or insured is a resident of this state at the time of the insured event; or (ii) the property from which the claim arises is permanently located in this state. "Covered claim" shall not include any amount due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise, nor shall "covered claim" include any first party claims by an insured whose net worth exceeds twenty-five million dollars ($25,000,000) on December 31 of the year prior to the year in which the insurer becomes an insolvent insurer; provided that an insured's net worth on that date shall be deemed to include the aggregate net worth of the insured and all of its subsidiaries as calculated on a consolidated basis.

(5) INSOLVENT INSURER. An insurer licensed to transact insurance in this state, either at the time the policy was issued or when the insured event occurred, and against whom an order of liquidation with a finding of insolvency has been entered after January 1, 1981, by a court of competent jurisdiction in the insurer's state of domicile or of this state under the provisions of Chapter 32 of this title, which order of liquidation has not been stayed or been the subject of a writ of supersedeas bonds or other comparable order.

(6) MEMBER INSURER. Any person who (i) writes any kind of insurance to which this chapter applies under Section 27-42-3, including the exchange of reciprocal or interinsurance contracts, and (ii) is licensed to transact insurance in this state.

(7) NET DIRECT WRITTEN PREMIUMS. Direct gross premiums written in this state on insurance policies to which this chapter applies, less return premiums thereon and dividends paid or credited to policyholders on such direct business. "Net direct written premiums" does not include premiums on contracts between insurers or reinsurers.

(8) PERSON. Any individual, corporation, partnership, association, or voluntary organization.

(Acts 1980, No. 80-806, p. 1639, §5; Act 2000-743, p. 1650, §1.)