Alabama § 27-6-3 - Deposits of Insurers - Composition.

§ 27-6-3. Deposits of Insurers - Composition.

(a) All such deposits required under Sections 27-3-11, 27-3-12, and 27-3-14 for authority to transact insurance in this state shall consist of certified checks, or certificates of deposit or any combination of securities, the market value of which is readily ascertainable, and, if negotiable by delivery or assignment, of the kinds described below:

(1) United States government obligations;

(2) State, county, municipal, and school obligations;

(3) Public improvement obligations;

(4) Housing authority obligations;

(5) Obligations, stock of certain federal agencies;

(6) Canadian governmental obligations;

(7) International banks;

(8) Corporate obligations;

(9) Equipment trust obligations; and

(10) Railroad leased lines, terminal obligations.

(b) All such deposits required of a domestic insurer pursuant to the laws of another state, province, or country shall be comprised of securities, if negotiable by delivery or assignment, of the kind, or kinds, required or permitted by the laws of such state, province, or country, except common stocks, mortgages of any kind, and real estate.

(c) Deposits of the reserves of a domestic life insurer under laws heretofore in force shall consist of securities, if negotiable by delivery or assignment, eligible for investment of the insurer’s reserves.

(d) Deposits of foreign insurers made in this state under the retaliatory provision, Section 27-3-29, shall consist of such securities or assets as are required by the commissioner pursuant to such provision.

(e) Any insurance company, with respect to its general account or separate accounts, is authorized to deposit or arrange for the deposit of securities which it may own in a clearing corporation, as defined in Section 7-8-102(3), or in a federal reserve bank under book-entry system. When such securities are so deposited, certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of such clearing corporation with any other securities deposited in such clearing corporation by any person, regardless of the ownership of such securities, and securities of small denominations may be merged into one or more certificates of larger denominations. Title to such securities may be transferred by bookkeeping entry on the books of such clearing corporation or federal reserve bank without physical delivery of certificates representing such securities. Any company making deposits by means of such securities shall provide to the commissioner evidence customarily issued by federal reserve banks and clearing corporations establishing that the securities are actually recorded in a book-entry account or actually held in safekeeping by a clearing corporation. Securities deposited in a clearing corporation or in a book-entry account and used to meet the deposit requirements under the insurance laws of this state shall be under the control of the commissioner and shall not be withdrawn by the insurance company without the approval of the commissioner.