Alabama § 27-12-14 - Inducements as to Property, Casualty, or Surety Insurance.

§ 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 therefor 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.