Alabama

We put Unfair Claims Practices, Unfair Trade Practices along with the regulation for 3rd Parties on top and organized all other laws alphabetically to make it easier for you to find a particular law or regulation. The last section is Miscellaneous and includes all other provisions we thought could be helpful to you but didn't fit in any of the above 17 categories. To get to a particular topic on this page you can either click on it in the table of contents or scroll down. To get back to the table of contents simply click on the link that says back to top on beneath each section.

No insurer shall, without just cause, refuse to pay or settle claims arising under coverages provided by its policies in this state and with such frequency as to indicate a general business practice in this state, which general business practice is evidenced by:
(1) A substantial increase in the number of complaints against the insurer received by the insurance department;
(2) A substantial increase in the number of lawsuits against the insurer or its insureds by claimants; and
(3) Other relevant evidence.

Section 27-12-2
General prohibition against unfair competition, etc.
No person shall engage in this state in any trade practice which is defined in this chapter as, or determined pursuant to this chapter to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.

Section 27-12-6
"Twisting."
No person shall make or issue, or cause to be made or issued, any written or oral statement misrepresenting or making misleading incomplete comparisons as to the terms, conditions or benefits contained in any policy for the purpose of inducing, or attempting or tending to induce, the policyholder to lapse, forfeit, surrender, retain, exchange or convert any insurance policy.

Section 27-12-7
False statements and entries.
(a) No person shall file with any supervisory or other public official or make, publish, disseminate, circulate or deliver to any person or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of financial condition of an insurer with intent to deceive.
(b) No person shall make any false entry in any book, report or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom such insurer is required by law to report, or who has authority by law to examine into its condition or into any of its affairs or, with like intent, willfully omit to make a true entry of any material fact pertaining to the business of such insurer in any book, report or statement of such insurer.
(c) Any insurer willfully making a false annual or other statement required of it under this title and individuals knowingly making oath to and subscribing the same shall be punished by a fine of not less than $500.00 nor exceeding $5,000.00.

Section 27-12-8
Boycotts, coercion and intimidation.
No person shall enter into any agreement to commit or, by any concerted action, commit any act of boycott, coercion or intimidation resulting in, or tending to result in, unreasonable restraint of, or monopoly in, the business of insurance.

Section 27-12-9
Malicious statements on financial condition.
No person shall make, publish, disseminate or circulate, directly or indirectly, or aid, abet or encourage the making, publishing, disseminating or circulating of any oral or written statement or any pamphlet, circular, article or literature which is false or maliciously critical of, or derogatory to, the financial condition of an insurer or of an organization proposing to become an insurer and which is calculated to injure any person engaged, or proposing to engage, in the business of insurance.

Section 27-12-10
Financial inducements to purchase insurance.
(a) No person shall issue or deliver, or permit its agents, officers or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any common-law corporation, or securities, or any special or advisory board contract or other contract of any kind promising returns and profits as an inducement to insurance. The commissioner shall refuse to issue certificate a of authority or license to any insurer or other person that is in violation of this section and shall revoke the certificate of authority or license of any such violating insurer or person if such authority or license is already outstanding.
(b) No person shall issue or deliver, or permit its agents, officers or employees to issue or deliver, in this state, any life insurance policy or contract of annuity in which are used such words as "investment plan," "expansion plan," "profit-sharing," "charter plan," "founders' plan," "surplus-sharing," or similar language in such context or under such circumstances or conditions as to have the capacity or tendency to mislead a purchaser or prospective purchaser of life insurance to believe that he will receive or that it is probable he will receive something other than an insurance policy, or contract, or some benefit not provided in the policy or contract or some benefit not available to other persons of the same class and equal expectation of life.
(c) No insurer shall issue or deliver, or permit its agents, officers or employees to issue or deliver, in this state a policy of life insurance containing benefits in the form of "coupons" or "guaranteed annual endowment" benefits unless the premium charged for the insurance coverage and the premium charged for the "coupons" or "guaranteed annual endowment" benefits are prominently specified in the policy separately from each other in dollar amounts. This shall not apply to any policy in which the amount of any pure endowment or periodic benefit, or benefits, payable during any policy year is greater than the total annual premium for such year.

Section 27-12-14
Inducements as to property, casualty or surety insurance.
(a) No property, casualty or surety insurer, or any employee thereof, and no broker, agent or solicitor shall pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to insurance or after insurance has been effected, any rebate, discount, abatement, credit or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon or any valuable consideration or inducement whatever not specified in the policy except to the extent provided for in rating systems filed with the commissioner by, or on behalf of, the insurer and approved by the commissioner.
(b) No insured named in a policy nor any employee of such insured shall knowingly receive or accept, directly or indirectly, any such rebate, discount, abatement, credit or reduction of premium.
(c) Nothing in this section shall be construed as prohibiting the payment of commissions or other compensation to duly licensed agents, brokers or solicitors or as prohibiting any insurer from allowing or returning to its participating policyholders, members or subscribers, dividends, savings or the unused or unabsorbed portion of premiums and premium deposits.
(d) Nothing in this section or in this title shall be deemed to invalidate any insurance contract, or any amendment of, or agreement as to, such contract or the continuance or renewal of such contract which does not comply with Chapters 12 or 14 of this title or any other provisions of this title, and no insured named in the policy and no officer or employee of such insured shall be deemed to have violated any provision of this title by knowingly receiving or accepting such contract, amendment, agreement, continuance or renewal, provided, that this subsection shall not be deemed to relieve any authorized insurer or licensed agent, broker, solicitor or surplus line broker of any forfeiture or penalty otherwise applicable under this title on account of any such violation, nor relieve any person otherwise liable therefore with respect to any tax payable on account of such insurance, nor relieve any insured named in the policy nor any employee of such insured who knowingly receives or accepts any rebate, discount, abatement, credit or reduction of the premium in violation of subsection (b) of this section, of any penalty otherwise applicable under this title on account of any such violation.
(e) No person in this state shall advertise, offer or provide free insurance as an inducement to the purchase or sale of real or personal property or of services, directly or indirectly, connected with such real or personal property.

(1) For the purposes of this subsection, "free insurance" is insurance for which no identifiable and additional charge is made to the purchase of such real property or personal property or services or insurance for which an identifiable or additional charge is made in an amount less than the cost of such insurance as to the seller or other person, other than the insurer providing the same.

(2) This subsection does not apply to:
a. Insurance for loss of, or damage to, the real or personal property involved in any such sale or services under a policy covering the interests therein of the seller or vendor;
b. Blanket disability insurance as defined in Section 27-20-4;
c. Credit life insurance or credit disability insurance;
d. Any individual, isolated, nonrecurring, unadvertised transaction not in regular course of business; or
e. Title insurance.
(3) No person shall use the word "free" to describe life or disability insurance in connection with the advertising or offering for sale of any kind of goods, merchandise or services.

Section 27-12-15
Purchase of insurance as condition precedent to sale or loan on property.
No person, firm or corporation engaged in selling real or personal property or of lending money on the security of real or personal property and no trustee, director, officer, agent or other employee of any such person, firm or corporation shall require, or attempt or purport to require, as a condition precedent, concurrent or subsequent, to the sale or to financing the purchase of such property or to lending money upon the security of a mortgage thereon nor as a condition precedent, concurrent or subsequent, for the renewal or extension of any such loan or mortgage or for the performance of any other act in connection therewith that the person, firm or corporation purchasing such property, or for whom such purchase is to be financed, or to whom the money is to be loaned, or for whom such extension, renewal or other act is to be granted or performed negotiate any policy of insurance, or renewal thereof, covering such property or covering any liability arising from the ownership, maintenance or use thereof through a particular insurer, agent, solicitor or broker. This section shall not prevent the exercise by any person, firm or corporation of its right to designate reasonable and nondiscriminatory financial requirements as to insurer, the terms and provisions of the policy and the adequacy of the coverage with respect to insurance on property pledged or mortgaged to such person, firm or corporation; provided, however, that nothing in this section shall be construed as to prohibit the right of any person, firm or corporation from voluntarily negotiating for or soliciting the placing of such insurance.

Unlawful Trade Practices Section 8-19-5
The following deceptive acts or practices in the conduct of any trade or commerce are hereby declared to be unlawful:
(1) Passing off goods or services as those of another, provided that this section shall not prohibit the private labeling of goods or services.
(2) Causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services.
(3) Causing confusion or misunderstanding as to the affiliation, connection, or association with, or certification by another, provided that this section shall not prohibit the private labeling of goods or services.
(4) Using deceptive representations or designations of geographic origin in connection with goods or services.

According to a data the Society for Collision Repair Specialists collected between 1995 and 1999 Caps in Alabama are illegal. In other words, insurers cannot put a limit on what they will pay for a product, procedure or repair. We published a story on caps including a table with the data collected by SCRS in our February 2000 issue.

______________ Insurance Insured:

______________________ Claim #:

______________________ Vehicle ID:

Attn: Customer Service

In your repair appraisal of my vehicle, you limited paint/paint materials payment and/or related costs, such as refinish labor, to $___, while my cost is $___, or $___ more than you allow.

Your policy with me promises to restore my car to preloss condition at no cost other than the deductible my policy specifies. If I have to pay more than you allow for paint/materials and other costs, I will have to pay my deductible plus $___ before my car will be returned to me. Please tell me exactly where my policy says you may limit payments for paint/materials and other costs. If you can't, please authorize the full cost, $___, for all expenses.

If you don't authorize full pay and you can't show me where my policy says you may restrict payment, I shall report this incident to [State] Department of Insurance, stating that ____________ Insurance isn't honoring its promise to restore my vehicle to preloss condition at no cost other than the deductible as called for in the policy.

I look forward to your prompt response; I'd like my vehicle repaired as quickly as possible.

Sincerely, cc: Insurance Commissioner

Section 7-2-201
Formal requirements; statute of frauds.
(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon, but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.
(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.
(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable:
(a) If the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or
(b) If the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or
(c) With respect to goods for which payment has been made and accepted or which have been received and accepted (Section 7-2-606).

in Unfair Trade Practices Section 8-19-5 Subsections 9+
(9) Advertising goods or services with intent not to sell them as advertised.
(10) Advertising goods or services with intent not to supply reasonably expectable public demand unless the advertisement discloses a limitation of quantity.
(11) Making a false or misleading statement of fact concerning the reasons for, existence of, or amounts of, price reductions.

Authority to transact insurance -- use of name by insurer Section 27-3-5
(a) No insurer shall be authorized to transact insurance which has or uses a name so similar to that of another insurer already so authorized as likely to mislead the public.
(b) No life insurer shall be so authorized which has or uses a name deceptively similar to that of another insurer authorized to transact insurance in this state within the preceding 10 years if life insurance policies originally issued by such other insurer are still outstanding in this state.
(c) No insurer shall be so authorized which has or uses a name which tends to deceive or mislead as to the type of organization of the insurer.
(d) In case of conflict of names hereafter between two insurers, or a conflict otherwise prohibited under the foregoing subsections of this section, the commissioner may permit or require, as a condition to the issuance of an original certificate of authority to an applicant insurer, that such insurer shall use in Alabama such supplementation or modification of its name or such business name as may reasonably be necessary to avoid such conflict. No such name, supplementation or modification shall contain the principal identifying factor contained in the name of any other insurer already authorized to transact insurance in this state.

Section 5-19-12
Buyer's right to cancel home solicitation sale.
(a) A buyer has the right to cancel a home solicitation sale until midnight of the third business day following execution by the buyer of an agreement or offer to purchase, which notice is effective when delivered or when deposited in the mail properly addressed to the seller, postage prepaid. The seller must deliver to the buyer and obtain the buyer's written signature to a written agreement or offer to purchase designating as the date of the transaction the date on which the buyer actually signs and containing the following under the conspicuous caption:

Alternately, the seller may deliver to the buyer the notice required by the Federal Trade Commission Trade Regulation Rule concerning Cooling-Off Period for Sales Made at Homes or at Certain Other Locations, Title 16, Code of Federal Regulations, Part 429, as amended from time to time, which shall satisfy the notice requirement of this section. Until the seller has complied with this section the buyer may cancel the home solicitation sale within one year after the date of the sale by notifying the seller in any manner and by any means of the buyer's intention to cancel.
(b) The buyer has a duty to take reasonable care of the goods in the buyer's possession before cancellation and for a reasonable time thereafter, during which time the goods are otherwise at seller's risk. Within 10 days after a home solicitation sale has been cancelled or an offer to purchase revoked, the seller must tender to the buyer any payments made or goods traded in by the buyer, or the amount equal to the trade-in allowance stated in the agreement, and any note or other evidence of debt. Within a reasonable time thereafter the buyer, upon demand, must tender at the buyer's residence to the seller any goods delivered by the seller. If the seller fails to demand such possession within 20 days after receipt of the notice, the goods become the property of the buyer without obligation to pay for them.
(c) The provisions of this section shall not apply if the buyer furnishes the seller with a separate dated and signed personal statement describing an emergency requiring immediate remedy and modifying or waiving his right to cancel. The use of printed forms for this purpose is prohibited.
The insurance Commission did not have any information on home sales.

Identification of nonoriginal equipment manufacturer aftermarket crash parts manufactured or supplied in this state Section 32-17A
Any nonoriginal equipment manufacturer aftermarket crash part manufactured or supplied for use in this state on or after January 1, 1990, shall have affixed thereto or inscribed thereon the logo, identification number, or name of its manufacturer. Such manufacturer's logo, identification number, or name shall be visible after installation whenever practicable.

Section 32-17A-3
Disclosure document.
In all instances where nonoriginal equipment manufacturer aftermarket crash parts are used in preparing an estimate for repairs, the written estimate prepared by the insurer and repair facility shall clearly identify each such part. A disclosure document attached to the estimate shall contain the following information in no smaller than 10 point type:

Section 27-9-2
License - Requirement; application; issuance; fee; firms and corporations.
(a) No person shall in this state act as, or hold himself out to be, an adjuster unless then licensed therefor under this chapter. Application for license shall be made to the commissioner according to forms as prescribed and furnished by him.
(b) The commissioner shall promptly issue a license to each person who has properly completed application therefor and who is qualified for the license under this chapter.
(c) At time of application for the license, the applicant shall tender to the commissioner the license fee specified in Section 27-4-2. If the license is refused, the commissioner shall refund the license fee to the applicant or person entitled thereto.
(d) Firms and corporations, as well as individuals, may be licensed as an adjuster. Each individual associated in such firm or corporation and who exercises, or proposes to exercise, license powers shall file application with the commissioner, pay the license fee and qualify as though for an individual license. The license issued to a firm or corporation shall list thereon all individuals who are thereby authorized to act as an adjuster or, in lieu thereof, the commissioner may issue a separate license as to each such individual.
(e) The license fee provided for in this section is payable to the state, as provided in Section 27-4-2, and no license or fee shall be paid to the county.

Section 27-9-3
License - Qualifications.
To be licensed as an adjuster, the applicant must be qualified therefore as follows:
(1) Must be an individual 19 years of age or more;
(2) Must be a resident in and of Alabama or resident of another state which will permit residents of Alabama regularly to act as adjusters in such other state;
(3) Must be a full-time salaried employee of a licensed adjuster, or a graduate of a recognized law school or must have had experience or special education or training as to the handling of loss claims under insurance contracts of sufficient duration and extent reasonably to make him competent to fulfill the responsibilities of an adjuster; and
(4) Must be trustworthy and of good character.
Insurers to do business through licensed agents, etc.; exceptions.
(a) No insurer shall, in this state, directly or indirectly, accept applications for insurance, negotiate for or issue any policy or contract of insurance or assume direct liability as to a subject of insurance resident, located, or to be performed in this state unless through insurance producers duly licensed under the provisions of this title.
more>> http://www.legislature.state.al.us/CodeofAlabama/1975/coatoc.htm

Section 8-19A and C
Section 8-19C-2
Database of subscribers objecting to telephone solicitations.
(a) No person or entity may make or cause to be made any telephone solicitation to the telephone line of any residential subscriber in this state who has given notice to the commission of his or her objection to receiving telephone solicitations.
(b)(1) The commission shall establish and operate a database to compile a list of telephone numbers of residential subscribers who object to receiving telephone solicitations. The commission shall have the database in operation before July 1, 2000.
(2) The database may be operated by the commission or by another entity under contract with the commission.
(3) Before July 1, 2000, the commission shall promulgate regulations which shall include all of the following:
a. A requirement that each local exchange company and each competing local exchange carrier shall inform on an annual basis its residential subscribers of the opportunity to provide notification to the commission or its contractor that the subscriber objects to receiving telephone solicitations.
The information shall be disseminated at the option of the carrier by television, radio, or newspaper advertisements; written correspondence; bill insert or messages; telephone book subscription forms; or any other method not expressly prohibited.
b. Methods by which each residential subscriber may give notice to the commission or its contractor of his or her objection to receiving solicitations or revocation of the notice.
c. Methods by which a notice of objection becomes effective and the effect of a change of telephone number on the notice.
d. Methods by which objections and revocations are collected and added to the database.
e. Methods by which a person or entity desiring to make telephone solicitations may obtain access to the database as required to avoid calling the telephone numbers of residential subscribers included in the database.
f. All other matters relating to the database that the commission deems necessary.
(4) If, pursuant to 47 U.S.C. Section 227(c)(3), the Federal Communications Commission establishes a single national database of telephone numbers of subscribers who object to receiving telephone solicitations, the commission shall include the part of the single national database that relates to Alabama in the database established under this section.

Section 8-19C-5
Identification by telephone solicitors required.
(a) Any person or entity who makes a telephone solicitation to the telephone line of a residential subscriber in this state shall identify himself or herself as provided under Section 8-19A-12.
(b) No person or entity who makes a telephone solicitation to the telephone line of a residential subscriber in this state may knowingly utilize a method to block or otherwise circumvent the use of a caller identification service by the subscriber.

Section 8-19A-6
Identification of certain affiliated sellers or salespersons.
(a) With respect to any person identified pursuant to Section 8-19A-5, an applicant for a license as a commercial telephone seller shall state in his or her application the identity of any affiliated commercial seller or salesperson who:
(1) Has been convicted of, or is under indictment or information for, racketeering or any offense involving fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property. Conviction includes a finding of guilt where adjudication has been withheld.
(2) Is involved in pending litigation or has had entered against him or her an injunction, a temporary restraining order, or a final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, in any civil or administrative action involving racketeering, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property or the use of any untrue, deceptive, or misleading representation or the use of any unfair, unlawful, or deceptive trade practice.
(3) Is, or ever has been, subject to any litigation, injunction, temporary restraining order, or final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document or any restrictive court order relating to a business activity as the result of any action brought by a governmental agency, including any action affecting any license to do business or practice an occupation or trade.
(4) Has at any time during the previous seven years filed for bankruptcy, been adjudged bankrupt, or been reorganized because of insolvency.
(5) Has been a principal, director, officer, or trustee of, or a general or limited partner in, or had responsibilities as a manager in, any corporation, partnership, joint venture, or other entity that filed for bankruptcy, was adjudged bankrupt, or was reorganized because of insolvency within one year after the person held that position. The disclosures required in subdivision (4) shall be applicable insofar as they relate to the applicant commercial telephone seller, as well as any affiliated commercial seller or salesperson.
(b) (1) For any person described in subsection (a), the applicant shall:
a. Identify the court or administrative agency rendering the conviction, judgment, or order against the person or pending litigation.
b. Provide the docket number of the matter, the date of the conviction, judgment, or order, and the name of the governmental agency, if any, that brought the action resulting in the conviction, judgment, or order.
(2) For any person described in subdivision (5), the applicant shall provide the name and address of the person filing for bankruptcy, adjudged bankrupt, or reorganized because of insolvency, the date of the action, the court which exercised jurisdiction, and the docket number of the matter.
(c) Each commercial telephone seller shall disclose to the division the name, address, and account number of each institution where banking or similar monetary transactions are done by the commercial telephone seller.

Section 8-19A-14
Contract requirements; credit cards; notice of cancellation; returns; purchaser's rights.
(a) A purchase of consumer goods or services ordered as a result of a commercial telephone solicitation as defined in this chapter, if not followed by a signed written contract, is not final. If a contract is not made in compliance with this section, it is not valid and enforceable against the purchaser. The contract made pursuant to a commercial telephone solicitation shall:
(1) Be reduced to writing and be signed by the purchaser.
(2) Match the description of the goods or services as that principally used in the telephone solicitation.
(3) Contain the name, address, telephone number, and registration number of the commercial telephone seller and the salesperson, the total price of the contract, and a detailed description of the goods or services being sold.
(4) Contain the value or worth of any item, good, or service specified in Section 8-19A-13, and the basis for the valuation.
(5) Contain all terms and conditions a purchaser is required to satisfy in order to receive any item, good, or service specified in Section 8-19A-13.
(6) Contain, if they are ascertainable, the odds, for a given purchaser, of receiving any item specified in Section 8-19A-13.
(7) Contain, if a purchaser is to receive fewer than all the items specified in Section 8-19A-13 described by the seller:
a. The manner in which the commercial telephone seller decides which item a given purchaser is to receive.
b. If they are ascertainable, the odds, for a given purchaser, of receiving each item described.
(8) Contain, in at least 12-point type, immediately preceding the signature, the following statement: "You are not obligated to pay any money unless you sign this contract and return it to the commercial telephone seller."
(9) Not exclude from its terms any oral or written representations made by the commercial telephone seller or salesperson to the purchaser in connection with the transaction.
(b) A commercial telephone seller who engages a salesperson to make, or cause to be made, a telephone sales call shall not make or submit any charge to the purchaser's credit card account until after the commercial telephone seller receives from the purchaser a copy of the contract which complies with this section. The commercial telephone seller shall then send the purchaser a written confirmation of the sale.
(c) The written contract shall contain an explanation of the purchaser's rights under this section and a statement indicating when notice of cancellation is required to be sent. The purchaser may give notice of cancellation to the commercial telephone seller in writing within three business days after receipt of the confirmation. If the commercial telephone seller has not provided an address for receipt of the notice, cancellation is effective by mailing the notice to the division.
(d) Notice of cancellation by the commercial telephone seller shall be given by certified mail, return receipt requested, and shall be effective when mailed. Notice of cancellation given by the purchaser need not take a particular form and is sufficient if it indicates, by any form of written expression, the name and address of the purchaser and the purchaser's stated intention not to be bound by the sale.
(e) If a commercial telephone seller violates this act in making a sale, or fails to deliver an item within 30 calendar days, the contract is voidable by giving notice to the commercial telephone seller, and the purchaser is entitled to a return from the seller, within 14 days, of all consideration paid. Notice of cancellation given by the purchaser need not take a particular form and is sufficient given orally or in writing. Upon receipt by the purchaser of the consideration paid to the commercial telephone seller, the purchaser shall return to the commercial telephone seller the items received by the purchaser. Any cost of returning the items received by the purchaser shall be borne by the commercial telephone seller, by providing or guaranteeing payment for return shipping. If the payment is not provided or guaranteed, the purchaser may keep, without further obligation, the items received.
(f) A person who purchases goods or services pursuant to a solicitation governed by this chapter shall be given a refund, credit, or replacement, at his or her option, if:
(1) The goods or services are defective, are not as represented, or if any item described pursuant to this chapter is not received as promised.
(2) He or she returns the goods or makes a written request for the refund, credit, or replacement within seven days after he or she receives the goods or services. A return or request is timely if shipment is made or the request is postmarked, properly addressed and postage prepaid, within the time provided by this section.
(g) If a purchaser of goods returns only a portion of the goods, the refund, credit, or replacement required by this section may be prorated accordingly.
(h) The refund, credit, or replacement required by this section shall be guaranteed by the commercial telephone seller who made the sale, regardless of whether payment for the goods or services is made to that person.
(i) Any contract, agreement to purchase, or written confirmation executed by a seller which purports to waive the purchaser's rights under this chapter is against public policy and shall be unenforceable, provided that an agreement between a purchaser and commercial telephone seller to extend the delivery time of an item to more than 30 days shall be enforceable if the commercial telephone seller has a reasonable basis to expect that he or she will be unable to ship the item within 30 days and if the agreement is included in the terms of the written confirmation.
(j) Where a contract or agreement to purchase confers on a purchaser greater rights to cancellation, refund, or return than those enumerated in this chapter, the contract shall be enforceable and not in violation of this chapter, provided that all rights under a contract or agreement to purchase shall be specifically stated in a written confirmation sent pursuant to this section.
(k) The provisions of this section shall not reduce, restrict, or eliminate any existing rights or remedies available to purchasers.
(l) Any sale in which the consumer is given a full refund or credit for the return of undamaged and unused goods, or a cancellation of services notice is given to the seller, within seven days after receipt of the goods or services by the consumer, is exempt from the requirements of subsections (a) to (e), inclusive, and the seller shall process the refund or credit to the consumer's credit card account within 30 days after receipt of the returned merchandise by the consumer or within 30 days after receipt of the cancellation notice from the consumer, process the refund or credit to the consumer's credit card account for any services not yet performed or a pro rata refund or credit to the consumer's credit card for any services not yet performed for the consumer.

Section 8-19A-15
Violations.
(a) It shall be unlawful for any commercial telephone seller or salesperson to require that payment be by credit card authorization or otherwise to announce a preference for that method of payment.
(b) It shall be unlawful for any commercial telephone seller to employ, or be affiliated with, any unlicensed salesperson.
(c) It shall be unlawful for any salesperson to be employed by, or affiliated with, an unlicensed commercial telephone seller.
(d) It shall be unlawful for any commercial telephone seller or salesperson to be unlicensed.
(e) It shall be unlawful for any salesperson or commercial telephone seller to otherwise violate this chapter.

The Insurance Commission did not have any information on the claim payment laws.

Dismantling, destroying or changing identity of vehicle; certificates of title to be cancelled; salvage certificates; dealer transport license; responsibilities of insurance company upon settlement of claims; "total loss" defined; penalties regarding removal, sale, etc., of vehicle identification numbers, certificates, etc.; restrictions on transfer of salvage vehicles; application for inspection of salvage vehicle; inspection fee; "component parts" defined; "rebuilt" certificate of title. Section 32-8-87 starting at point b
(b) When the frame or engine is removed from a motor vehicle and not immediately replaced by another frame or engine, or when an insurance company has paid money or made other monetary settlement as compensation for a total loss of any motor vehicle, the motor vehicle shall be considered to be salvage. The owner of every motor vehicle in which total loss or salvage has occurred shall, within 72 hours after the total loss or salvage occurs, make application for a salvage certificate of title and forward to the department the certificate of origin or certificate of title to the motor vehicle, whereupon the department shall process the certificate of origin or certificate of title in a manner prescribed by law or regulation. An insurance company which pays money or makes other monetary settlement as compensation for total loss of a motor vehicle shall at the time of payment or monetary settlement obtain the vehicle's certificate of origin or certificate of title and, as soon as practicable after receiving them, shall forward them along with their application for a salvage certificate, to the department for processing. In the event the payment or monetary settlement was made because of the theft of the vehicle, which shall be considered a total loss as defined in this section, the insurance company shall forward the vehicle's properly assigned certificate of origin or certificate of title as provided herein, to the department as soon as practicable after the vehicle is recovered. When a stolen motor vehicle has been reported to the department in compliance with this section and is later recovered, and for which a salvage certificate has been issued, the owner recorded on the salvage certificate shall assign that certificate to the purchaser. A person who violates this subsection shall, upon conviction, be guilty of a Class C misdemeanor and shall be punishable as required by law.
(c) If an insurance company acquires a motor vehicle in settlement of an insurance claim and holds the vehicle for resale and procures the certificate of origin or certificate of title from the owner or lienholder within 15 days after delivery of the vehicle to the insurance company, and if the vehicle was not a total loss as defined by this section, the insurance company need not send the certificate of origin or certificate of title to the department but, upon transferring the vehicle to another person, other than by the creation of a security interest, the insurance company shall complete an affidavit of acquisition and disposition of the motor vehicle on a form prescribed by the department and deliver the certificate of origin or certificate of title, affidavit, and any other documents required by the department to the transferee at the time of delivery of the motor vehicle.
(d) For the purposes of this section, a total loss shall occur when an insurance company or any other person pays or makes other monetary settlement to a person when a vehicle is damaged and the damage to the vehicle is greater than or equal to 75 percent of the fair retail value of the vehicle prior to damage as set forth in a current edition of a nationally recognized compilation of retail values, including automated data bases, as approved by the department. The compensation for total loss as defined in this subsection shall not include payments by an insurer or other person for medical care, bodily injury, vehicle rental, or for anything other than the amount paid for the actual damage to the motor vehicle. A vehicle that has sustained minor damage as a result of theft or vandalism shall not be considered a total loss. Any person acquiring ownership of a damaged motor vehicle that meets the definition of total loss for which a salvage title has not been issued shall apply for a salvage title, other than a scrap metal processor acquiring such vehicle for purposes of recycling into metallic scrap for remelting purposes only. This application shall be made before the vehicle is further transferred, but in any event, within 30 days after ownership is acquired.
(e) It shall be unlawful for the owner of any junkyard, salvage yard, or motor vehicle dismantler and parts recycler or his or her agents or employees to have in their possession any motor vehicle which is junk or salvage or a total loss when the manufacturer's vehicle identification number plate or plates, authorized replacement vehicle identification number plate or plates, or serial plate or plates have been removed, unless previously required to be removed by a statute or law of this state or another jurisdiction. A person who violates this subsection shall, upon conviction, be guilty of a Class C misdemeanor and shall be punishable as required by law.
(f) It shall be unlawful for a person, firm, or corporation to possess, sell or exchange, offer to sell or exchange, or to give away any certificate of origin, certificate of title, salvage certificate of title, manufacturer's identification number plate or plates, authorized replacement vehicle identification number plate or plates, serial plate or plates, or motor vehicle license plate or plates of any motor vehicle which has been scrapped, dismantled, or sold as junk or salvage or as a total loss contrary to this section, and every officer, agent, or employee of a person, firm, or corporation, and every person who shall authorize, direct, aid in or consent to the possession, sale or exchange, or offer to sell, exchange, or give away such certificate of origin, certificate of title, salvage certificate of title, manufacturer's vehicle identification number plate or plates, authorized replacement vehicle identification number plate or plates, serial plate or plates, or motor vehicle license plate or plates contrary to this section, shall, upon conviction, be guilty of a Class C misdemeanor and shall be punishable as required by law.

DATE:September 21, 2000
RE:Surcharges for Accidents Caused by Defective Tires
Most of the country is aware that tire manufacturer Bridgestone/Firestone has issued a national and international recall of certain sizes of tires. The recall was prompted by consumer complaints and auto collision data that demonstrate that tread separation has caused serious and fatal automobile accidents in the United States and abroad. The insurance industry has been credited with stepping forward and alerting federal authorities to the correlation between insurance claims and defective tires. For these efforts, the insurance industry should be applauded.
In Alabama, insurers of private passenger-type automobiles are allowed to assess surcharges to insurance premiums following payment of certain claims. However, most insurance companies do not surcharge a policy if the driver is reimbursed by the person responsible for the accident. Companies also are not allowed to charge for collisions with animals, "hit and run" accidents, accidents where the insured automobile was lawfully parked and other circumstances in which the driver is not "at fault."
We have learned that some insurers are surcharging policies for accidents caused by defective tires. In light of the national recall and federal investigation, we believe such rating to be unfairly discriminatory, in violation of Sections 27-13-35 and 27-13-65, Code of Alabama 1975. Defective tires and the accidents they cause pose an insurance risk to United States insurers. However, those insurers have full right of subrogation of those losses and are encouraged to pursue the responsible parties. Policyholders should not be required to bear the burden of surcharges while waiting for the insurance industry to pursue their subrogation claims. Litigation surrounding this recall and investigation will take years.
We require that insurers authorized to do business in Alabama cease surcharging policies for accidents caused by defective tires, regardless of the brand, effective immediately. Insurers are further directed to remove such current surcharges and refund or credit the amount of the surcharge to the policyholders beginning from the inception of the surcharge. This directive applies to surcharges on current in-force policies and policies purchased after the date of this bulletin.
Questions on this matter can be directed to the Property & Casualty Division, Alabama Department of Insurance Department, 334-241-4174 or E-mail to mfrick@insurance.state.al.us.

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