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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
Alabama's premium finance company bond is a flat $35,000, written by a surety licensed in Alabama and filed with the Department of Insurance alongside the license application. It is the one item in the packet you cannot prepare in house, and a surety can usually quote it from the owner's credit the same day so the rest of the filing is not waiting on it.
The Alabama Department of Insurance requires every applicant for a premium finance company license to file a $35,000 surety bond written by an insurer licensed in Alabama. Licensing is under Code of Ala. Title 27, Chapter 40, which makes it a misdemeanor to finance insurance premiums in Alabama without a license. The license runs annually and renews each October 1, and the department's current license fee is $264.
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The Department of Insurance's licensing instructions call for a $35,000 surety bond written by an insurance company licensed in Alabama. There is no tier by volume and no reduced amount for an insurance agency that only finances its own book. The bond runs to the State of Alabama through the Commissioner of Insurance and guarantees that the company will comply with Chapter 40 of Title 27 and handle financed premiums, refunds and cancellations as the law requires. Confirm the current bond form with the department before the surety executes it.
Code of Ala. 27-40-3 prohibits anyone from engaging in the business of financing insurance premiums in Alabama without first obtaining a license from the Commissioner of Insurance. Operating without one is a misdemeanor punishable by a fine of up to $1,000 or up to a year in jail, or both. The statute does not carve out an exemption for agencies. It does set a reduced statutory fee of $50 for an insurance agency that finances less than $150,000 in premiums of its own business each year, against the $200 statutory fee for everyone else. The department's instructions list a $264 license fee for both original and renewal filings, so budget for the figure the department quotes.
Under 27-40-4 the commissioner investigates each applicant and issues the license only when satisfied the applicant is competent and trustworthy, intends to act in good faith, has a good business reputation and relevant experience, and, if a corporation, is properly incorporated or authorized in Alabama. The bond does not substitute for that review.
An original application includes the application form, the $35,000 surety bond, the company's premium finance agreement, its delinquent notice, its cancellation notice, its rate chart and the license fee. The department takes the fee electronically through its AccessGov portal. Renewal needs the application, the fee and any rate or form changes not already on file. The legal name on the bond must match the applicant name on the application exactly.
The license is annual and must be renewed each October 1. Keep the bond continuous so it does not lapse across a renewal, and have the surety continue the existing bond rather than issue a new one each year.
The surety quotes a percentage of the $35,000 penal sum based on the owner's personal credit and the company's financial statements. A clean credit history and an established agency usually draw the lowest rate. Premium is paid annually for as long as the license is held.
$35,000. The Department of Insurance's licensing instructions require a $35,000 surety bond written by an insurance company licensed in Alabama. There is no tier.
Yes. Code of Ala. 27-40-3 requires a license for anyone in the business of financing insurance premiums. An agency financing less than $150,000 of its own business a year pays a reduced statutory fee, but the licensing and bond requirements still apply.
Every October 1. Renewal takes the application, the license fee and any rate or form changes not already on file with the department.
The original application packet includes the premium finance agreement, delinquent notice, cancellation notice and rate chart the company will use, plus the license fee. The department reviews those forms along with the bond.
Under 27-40-3 it is a misdemeanor punishable by a fine of up to $1,000 or up to one year in jail, or both.
The surety quotes a percentage of the $35,000 bond amount based on the owner's personal credit and the company's financial condition. Premium is paid annually while the bond is in force.
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