Prohibited Policy Cancellations, Non-Renewals, or Premium Increases

[LOGO] BOB RILEY GOVERNOR JIM L. RIDLING COMMISSIONER STATE OF ALABAMA DEPARTMENT OF INSURANCE 201 MONROE STREET, SUITE 502 POST OFFICE BOX 303351 MONTGOMERY, ALABAMA 36130-3351 TELEPHONE: (334) 269-3550 FACSIMILE: (334) 241-4192 INTERNET: www.aldoi.gov ASSISTANT COMMISSIONER REN WHEELER DEPUTY COMMISSIONER CHARLES M. ANGELL (acting) CHIEF OF STAFF RAGAN INGRAM CHIEF EXAMINER RICHARD L. FORD STATE FIRE MARSHAL EDWARD S. PAULK GENERAL COUNSEL REYN NORMAN ## BULLETIN NO. 2010-10 TO: All admitted insurers authorized to write property and casualty insurance FROM: Jim L. Ridling Commissioner of Insurance JLR DATE: November 4, 2010 EFFECTIVE: January 1, 2011 RE: Unlawful trade practices – property and automobile insurance - prohibition against certain cancellations, non-renewals, or premium increases RESCINDS: Bulletin dated July 20, 2004 (prohibited policy cancellations and non-renewals) 1. At its effective date, this Bulletin supersedes the bulletin dated July 20, 2004, addressing prohibited policy cancellations and non-renewals. 2. Certain actions described in this Bulletin are deemed unlawful trade practices for purposes of the Trade Practices Law, Ala. Code §§ 27-12-1 et seq. This Bulletin applies to all personal and commercial property and automobile insurance policies issued by insurance companies authorized to write property and casualty insurance in Alabama and by the Alabama Insurance Underwriting Association. 3. Effective January 1, 2011, an insurer shall not cancel or non-renew a personal or commercial property insurance policy or automobile insurance policy if based solely on a claim arising from a catastrophe, natural disaster, acts of nature, or weather-related causes. 4. Effective for new policies written on or after February 1, 2011, and for policy renewals on or after April 1, 2011, an insurer shall not do any of the following acts with respect to a personal or commercial property insurance policy or automobile insurance policy if based solely on a claim arising from a catastrophe, natural disaster, acts of nature, or weather-related causes: (a) Apply a premium surcharge to such policy; or EQUAL OPPORTUNITY EMPLOYER Bulletin No. 2010-10 November 4, 2010 Page 2 (b) Offer to place the coverage in another rating tier with the same insurer or place the coverage through an affiliated insurer if either such action would result in a higher premium. 5. By January 1, 2011, each insurer that has rating rules which do not comply with this Bulletin must file an amendment to its rating manual through SERFF℠ and provide a complete updated manual in the filing. 6. This Bulletin does not prohibit: (a) Cancelling or non-renewing a policy in the event of a claim arising from a catastrophe, natural disaster, acts of nature, or weather-related causes if there are additional substantial reasons for such action such as concealment, misrepresentation, or fraud by the insured relating to the policy, whether before or after the claim; or (b) Removing or discontinuing a claims-free discount after a claim arising from a catastrophe, natural disaster, acts of nature, or weather-related causes. JLR/JFM/bc