(a) No domestic insurer shall hereafter make any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors or to have the controlling or preemptive right to produce substantially all insurance business for the insurer, unless the contract is filed with, and approved by, the commissioner. The contract shall be deemed approved unless disapproved by the commissioner within 20 days after date of filing, subject to such reasonable extension of time as the commissioner may require by notice given within such 20 days. Any disapproval shall be delivered to the insurer in writing, stating the grounds therefor.
Terms Used In Alabama Code 27-27-27
Contract: A legal written agreement that becomes binding when signed.
person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
writing: includes typewriting and printing on paper. See Alabama Code 1-1-1
year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
(b) Any such contract shall provide that any such manager or producer of its business shall, within 90 days after expiration of each calendar year, furnish the insurer’s board of directors a written statement of amounts received under, or on account of, the contract and amounts expended thereunder during such calendar year, including the emoluments received therefrom by the respective directors, officers, and other principal management personnel of the manager or producer, and with such classification of items and further detail as the insurer’s board of directors may reasonably require.(c) The commissioner shall disapprove any such contract if he finds that it:
(1) Subjects the insurer to excessive charges;(2) Is to extend for an unreasonable length of time;(3) Does not contain fair and adequate standards of performance; or(4) Contains other inequitable provision, or provisions, which impair the proper interests of stockholders or members of the insurer.(d) This section does not apply as to contracts entered into prior to January 1, 1972, nor to extensions or amendments to such contracts.
