Alabama § 27-12-13 - Life, Annuity, and Disability Insurance - Exceptions to Discrimination, Rebates, or Special Inducements.

§ 27-12-13. Life, Annuity, and Disability Insurance - Exceptions to Discrimination, Rebates, or Special Inducements.

Nothing in Sections 27-12-11 and 27-12-12 shall be construed as including within the definition of discrimination, rebates, or special inducements any of the following practices:

(1) In the case of any contract of life insurance or annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided, that any such bonuses or abatement of premiums is fair and equitable to policyholders and for the best interests of the insurer and its policyholders;

(2) In the case of life or disability insurance policies issued on the industrial debit or weekly premium plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expense;

(3) Readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year;

(4) In the case of life insurers, allowing its bona fide employees to receive a commission or reduction on the premiums paid by them on policies on their own lives or on the lives of their children or spouse;

(5) Issuing life or disability insurance policies on a salary savings, bank draft, preauthorized check or payroll deduction plan or other similar plan at a reduced rate reasonably related to the savings made by the use of such plan;

(6) In the case of life insurance, a written agreement between the parties for an extension of time for payment of a second or subsequent premium on the policy upon condition that the failure to pay the amount as and when so agreed shall lapse the policy; but no such agreement shall impair any right to extended or paid-up insurance which the insured may have under the policy nor any right to have the premiums, or any part thereof, or the amount payable for such extension charged against the policy under the terms of the policy. No such agreement need be attached to or made a part of the policy so affected; or

(7) Paying commissions or other compensation to duly licensed agents or allowing or returning to participating policyholders dividends or savings.