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TEST TIP

Know that the $10,000 fine is per violation.

State Government

The insurance industry is regulated by Alabama State Government. Since insurance is a state regulated industry, the Alabama Department of Insurance (DOI), is part of the executive branch of the state government.

License Maintenance (continued)

Assumed Name, Records Maintenance, and Reporting of Administrative or Criminal Actions A producer must: Notify the Commissioner before using a name other than the producer's legal name Keep complete records of his/her transactions for 3 years, 2 years for limited lines credit insurance, and provide a verified copy to the Commissioner upon request Give an insured its records about the insured's policies upon request Report being the subject of:Any administrative action in another jurisdiction or by another agency in Alabama to the Commissioner within 30 days after the final disposition of the matterAny criminal prosecution in any jurisdiction to the Commissioner within 30 days after the date of the initial pretrial hearing

Property and Casualty Insurance Regulation

Binders A binder: Must include all usual policy terms and any applicable endorsements May be oral or written Is valid for up to 90 days until the policy is issued and may, with the Commissioner's written approval, be extended or renewed Is commonly known as a Temporary Insuring Agreement or a Temporary Insurance Policy Does not guarantee that the policy will be issued and the binder may be cancelled at anytime by the insurance company if the insured is found to be an excessive risk

Unfair Trade Practices

The following are unfair trade practices: Twisting - A person may not misleadingly compare policies in order to induce a policy's lapse, forfeit, surrender, exchange, or conversion. Falsification of Financial Information A person may not make any false:Statement about an insurer's financial condition with intent to deceiveEntry in an insurer's book, report, or statement with intent to deceive an examiner Any person falsifying financial information may be fined $500 to $5,000 Boycott, Coercion, or Intimidation - A person may not commit any act of boycott, coercion, or intimidation resulting in unreasonable restraint of, or monopoly in, the insurance business. Malicious Statements about Financial Condition (Defamation) - A person may not make any oral or written statement that is false concerning, maliciously critical of, or derogatory to an insurer's financial condition with intent to injure any person transacting insurance business. Unfair Discrimination - A person may not unfairly discriminate between individuals of the same class and life expectancy in a life or disability policy's or an annuity's rates or benefits, or in a disability policy's terms or conditions.

Know the following Unfair Trade Practices, Prohibited Activities:

Twisting Defamation Rebating Coercion

Strengthen Alabama Homes - Windstorm Damage Mitigation Information (continued)

Alabama Wind Mitigation Discounts (Applicable to Wind Insurance Premium) The Alabama Commissioner of Insurance adopted certain benchmark discounts which must be considered in all rating plans for property insurance policies providing wind coverage. These benchmarks were set forth on September 20, 2013 and are reproduced in this chart: Mitigation Category Existing HomeRoof > 5 Yrs. Existing HomeRoof < Yrs. New Home< 5 Yrs. FORTIFIED for Safer Living 50% 60% 60% FORTIFIED Home: Gold 40% 50% 50% FORTIFIED Home: Silver 35% 45% 45% FORTIFIED Home: Bronze 20% 35% 35% 2006 IRC or later 10% 20% 20%

Unauthorized Insurers Process Act

An unauthorized foreign or alien insurer that transacts any insurance business with an Alabama resident or with an authorized corporation is deemed to have appointed the Commissioner to receive service of legal process on its behalf. This makes the insurer subject to the jurisdiction of Alabama's courts in actions initiated under such contracts by insureds or beneficiaries.

TEST TIP

Know the primary difference between a Class C Misdemeanor and a Class C Felony is that The Class C felony is about fraud and forgery. There are no Class A or Class B Offenses on the exam.

TEST TIP 1

Know the reasons that an auto policy can be cancelled. Common examples of reasons are: If a driver is addicted to drugs or uses alcohol in excess, suffers from epilepsy, etc. If an insured's auto is unsafe to drive

Strengthen Alabama Homes - Windstorm Damage Mitigation Information

Alabama requires all property insurers to include in their rates and rating plans a premium discount or insurance rate reduction when the property is built in compliance with the 2006 International Residential Code, including all hurricane mitigation construction requirements, or the Fortified For Safe Living Standards. These discounts are mandatory for property located in Baldwin and Mobile counties. The Fortified designation can only be achieved by enlisting the help of a Fortified evaluator. The owners of new and existing homes may be eligible for a Fortified Home Hurricane Designation - The process starts with engaging an accredited Fortified Home Hurricane Evaluator. This accredited, or certified Fortified Evaluator will verify that the resilience upgrades of the home adhere to the stringent program standards and also ensure that the homeowner gets what they are expecting when they make this investment. To qualify, the home must be a single-family, detached structure built on a permanent foundation. Townhomes, duplexes, and other multi-unit buildings will not qualify. Depending on the level of resilience upgrades, a home can be awarded one of the following Fortified Home Hurricane designations: Bronze Silver Gold The Bronze and Silver designations are generally more appropriate for older homes. Meeting those requirements will harden the building systems most frequently damaged in a windstorm. The Gold designation requires documentation of engineering design and installation of a continuous load path, thus will most likely be achieved with new construction or an existing home undergoing substantial renovations. Before any homeowner begins to upgrade their home they must first engage a certified Fortified Evaluator to conduct a Fortified Home Hurricane Evaluation and issue a Current Condition Report (CCR). The CCR will identify: Assemblies and systems in the home that already meet the requirements Recommended retrofits required for a Fortified designation Any conditions that must also be addressed before proceeding with retrofits

Unfair Trade Practices, Prohibited Activities

Definitions For the purpose of unfair trade practices and prohibited activities, the following words have the following meanings: Negotiate - To confer with or offer advice to a policy buyer about a policy's benefits, terms, or conditions. Note This definition applies only if the person doing the negotiating sells insurance. Service Representative - An insurer's or managing general agent's salaried employee, other than an insurer's officer, manager, or managing general agent, who works with producers in selling or negotiating only property insurance.

Domestic Abuse Insurance Protection Act

It is unfair discrimination for an insurer to: Deny, nonrenew, cancel, restrict, or exclude coverage because of an applicant's or insured's status as, relationship with, or assistance to a victim of abuse Exclude or limit coverage or deny a claim, except under a liability policy, because of an insured's status as, relationship with, or assistance to a victim of abuse Charge a higher premium because of an applicant's or insured's status as, relationship with, or assistance to a victim of abuse Terminate health coverage for a victim of abuse, if the victim does not qualify for continuation or conversion of coverage under COBRA, because:The victim has divorced or separated from the abuser/primary insuredThe victim has lost custody of another victim of abuseThe abuser's coverage has been terminated An insurer may disclose information that an applicant, insured, or claimant is a victim of abuse, only: To the victim or his/her designee (in writing) To a health care provider As required by law or ordered by the Commissioner When necessary for a valid business purpose, only to:A reinsurer seeking to indemnify a policy covering the victim, if necessary to underwrite or satisfy its obligations under the reinsurance agreementsA party to a sale, transfer, merger, or consolidation of the insurer's businessMedical or claims personnel contracting with the insurer, if necessary to process an application, perform the insurer's duties, or protect the victimTo an attorney representing the insurerTo the policyowner or assignee, at policy delivery, if the policy contains information about the status of the victim of abuseTo any other entity deemed appropriate by the Commissioner An insurer may not require an applicant to disclose information about acts of abuse or status as a victim of abuse. To be considered a victim of abuse, a person must provide evidence of abuse to an insurer or demonstrate that a condition is related to abuse. An insurer refusing an application or denying a claim from a person having an abuse-related medical condition, or status, or an association or relationship with a victim of abuse must advise the applicant or the insured, in writing, of the specific reasons for the action.

TEST TIP 2

Know the Grounds for Cancellation/Nonrenewal.

TEST TIP

The following are the key points regarding what is required of a Surplus Lines Broker: Must maintain a bond in the amount of $50,000 Must file a report with the Commissioner within 30 days of the effective date of surplus lines insurance A contract must be initialed by, or have the producer's name and license number A contract must bear a stamp stating, the contract is a Surplus Line Coverage under Alabama Law

TEST TIP

Know that a producer's license may be suspended or revoked for any 1 or more of the above. The Commissioner may also fine the person up to $10,000 per violation.

Continuing Education Requirement

A producer or service representative must complete at least 24 classroom hours, at least 3 of which are in ethics or business practices, per biennial reporting period of courses, instructional programs, or seminars approved by the Commissioner. Any person newly licensed, for 12 months after the license's effective date Any officer of an insurer, if he/she is not involved in sales Any person who only works in an office and is not licensed as a nonresident in any other state—this person is only required to complete 6 classroom hours per year Alabama Legislature members who are active during any part of the biennial reporting period If a licensee fails to meet the above requirements, or submits a false Certificate of Compliance, his/her license may be suspended after a hearing. The Commissioner may grant an extension: Of 3 months to comply with these requirements, upon the licensee's request; if the request is denied, the licensee must meet the requirements within 30 days after notice of the denial Of more than 3 months if the licensee shows that special circumstances apply By signing an application for license renewal, a producer certifies that he/she has met these requirements. The insurer may sign the application on the producer's behalf but may not be held liable for a producer's failure to meet these requirements or to maintain records.

Workers' Compensation (continued)

Burial Expenses If an employee dies from a compensable accident or occupational disease, the employer must pay up to $6,500 for burial expenses, in addition to paying any medical and hospital expenses. Medical Expenses, Examination, Vocational Rehabilitation A liable employer must pay compensation and pay for any necessary medical and surgical treatment and supplies, physical rehabilitation, medicine, and prosthetics, including any repair, refitting, or replacement of artificial members damaged in a compensable accident. An injured employee must be examined by the employer's physician at the employer's request. The employee has the right to have his/her physician present. An employee must undergo vocational rehabilitation, at the employer's request and expense. Notice of Accident An injured employee must notify his/her employee of an accident within 5 days. An employee who fails to do so, except for proven physical or mental incapacity, is not entitled to any compensation. To receive compensation, written notice must be given within 90 days after the accident or death.

Insurer's Authorization

An insurance company must have the following in order to start up and be Domiciled and Authorized as a new company operating in the State of Alabama: $1,000,000 in Surplus A minimum number of applications as determined by state law Premiums collected for the minimum number of applications as determined by state law Certificate of Authority A person or insurer must have a Certificate of Authority to act as an insurer in, or from, Alabama. An insurer is not required to have a Certificate of Authority to: Issue policies or liquidate assets and liabilities, if doing so does not involve collecting new premiums Issue a policy covering only nonresident persons, locations, or services, if the policy is not solicited, written, or delivered in this state Transact surplus lines business or reinsurance A foreign insurer is not required to have a Certificate of Authority in order to invest in Alabama real estate or in securities.

Casualty Insurance Regulation

Auto Policies Financial Responsibility, Mandatory Coverage Security Requirements The DMV Director will determine, within 20 days after receiving an accident report, the security amount necessary to satisfy any judgment for damages recoverable against each operator or owner, if both of the following apply: The accident results in bodily injury, death, or property damages exceeding $500 The Director does not have enough evidence that the operator or owner has been released from liability, or has a written agreement or conditional release for paying an agreed amount in installments for all resulting claims If the operator or owner does not deposit the required security within 60 days after the Director receives the report, the Director shall suspend the person's license and vehicle registration. Exception A security deposit is not required if the operator or owner has an auto liability policy or bond in effect at the time of the accident. Coverage (Evidence of Insurance) Every auto owner must cover his/her auto with a liability policy, bond, or cash deposit, carry evidence of such liability coverage, and display the evidence to a law enforcement officer upon request. An auto liability policy must provide at least the following minimum liability limits: $25,000 for bodily injury or death per person per accident $50,000 for bodily injury or death to 2 or more persons per accident $25,000 for property damage per accident Note Calculate the 25/50/25 mandatory limits to a Combined Single limit. The maximum $50,000 BI per accident and the $25,000 PD per accident indicates that the maximum paid out for any one claim is $75,000. This is known as a Combined Single Limit. An auto liability bond or cash deposit must be for at least $50,000.

Bail Bonds (continued)

Effect of Undertaking, Discharge of Bail Parties to the payment of bail are jointly and severally bound for the defendant's appearance from the day stated in the bond until the defendant is legally discharged. If a defendant fails to appear, the parties may be released from liability under the bail by surrendering the defendant before a judgment is entered against them. Any party may, with a certified copy of the undertaking, arrest the defendant if in Alabama. A party against whom a judgment has been entered is still liable even if he/she arrests the defendant, unless the court finds that the defendant failed to appear for good and sufficient cause. Forfeiture Failure of Defendant to Appear Bail ensures a defendant's appearance at court. If the defendant fails to appear, the undertaking (i.e. bail or any other consideration given in lieu of bail) is forfeited. If the undertaking forfeited is a cash deposit instead of bail and the undertaking is not discharged or remitted, the clerk must, at 30 days, pay the deposit to the officer, official, or employee authorized by law to receive fines levied by that court. After the deposit is paid, the court must, without notifying the defendant, enter judgment for the entire deposit, and the deposit must become public money of the State General Fund. Conditional Judgment A conditional judgment must be set aside, and costs may not be imposed on a defendant, if he/she appears and shows enough cause for defaulting bail. If the defendant does not show enough cause, the judgment must be made absolute. Note In this situation, the court must allow a defendant opportunity to show enough cause.

Property Insurance Regulation

Industrial Fire Policies Definition, Method of Payment, Indemnity Limits Industrial Fire Insurance - Fire policies issued by insurers through producers operating on the debit agency system, a system under which a weekly or monthly collection percentage is paid based on either actual weekly or monthly premiums collected, or on increases in weekly or monthly premiums collected. An industrial fire policy must charge either a weekly or a monthly premium. An insurer may not issue a weekly and a monthly industrial fire policy on the same risk. The face amount of an industrial fire policy: With weekly premiums that covers buildings and other structures or contents may not exceed $7,500 With monthly premiums must be $40,000 for the building or dwelling and $20,000 for contents Policy and Forms An industrial fire policy may not use the caption "The Standard Fire Policy." The words "industrial," "monthly," "weekly premium," or "home service" must be incorporated as a part of the policy caption. All policies and endorsements are subject to approval by the Insurance Department. All industrial fire policies must be marketed by a producer licensed for industrial (debit) fire or property and casualty. Rate Filings and Annual Statistical Reports Industrial fire and allied lines rates and subsequent changes must be filed with the Insurance Department for approval. Every insurer must annually, by or on July 1st, file a statistical report showing a classification schedule for premiums and losses for the previous year's industrial fire business in Alabama. Note The report must show separate statistics for fire and lightning, extended, and all additional coverages.

Licensing Requirements - Obtaining a License

License Application and Exam To receive a resident insurance producer license, unless exempted, a resident individual must: Be at least 18 years of age Have not committed any act that is a ground for license denial, suspension, or revocation Complete 20 hours of prelicensing education per line of authority, unless exempted under Exemptions below Pass a written exam and pay an exam fee, unless exempted under Exemptions below Submit a Uniform Application for licensure to the Commissioner Note An individual failing the exam must reapply for licensure. An individual failing the second attempt must wait 3 months before retaking the exam. An individual failing the fourth attempt must wait 6 months before retaking the exam. Exemptions Persons exempt from this licensure requirement include all producers and service representatives licensed before 2002, unless the license was terminated and out of effect for 12 consecutive months. To act as an insurance producer, a business entity must designate a licensed individual producer as the person responsible for its compliance with state law, pay any required fees, and be issued an insurance producer license by the Commissioner.

Licensing Requirements - Obtaining a License (continued)

Nonresident License To receive a nonresident producer license, a nonresident must: Submit either a Uniform Application or a copy of the license application he/she submitted to his/her home state Pay the required fees Be a resident of a state issuing nonresident producer licenses to Alabama residents on the same basis Hold a current resident producer license in good standing in his/her home state A producer, regardless of residency, who moves to a different state must submit a change of address and provide certification from the new resident state within 30 days. Note Make sure that your email mailing address is current with the department of insurance. If the email notice is returned to the insurance department as undeliverable or the email address is not current, it will be handled the same way as an address change violation. You will be fined $50 for not keeping your email address current with the department. You have 30 days to update any email mailing address, mailing address, or name change with the insurance department to avoid the $50 fine. A surplus line broker or limited lines producer in another state may receive a nonresident surplus line broker or limited lines producer license, respectively. A nonresident producer who complies with his/her home state's continuing education requirements is deemed to comply with Alabama's continuing education requirements if the person's home state acknowledges fulfillment of its requirements on the same basis. Exceptions A person previously licensed for the same lines of insurance in another state is exempt from prelicensing education and exam requirements if: Currently licensed in that state The license application in Alabama is received within 90 days after the previous license is cancelled The prior state certifies that the applicant was in good standing ishing legal residency

Workers' Compensation (continued)

Preexisting Conditions An employer is not liable for any increase, caused by any preexisting injury or infirmity, in the degree or duration of a disability caused by an accident. Death Benefits Death benefits to a lone dependent are half the deceased employee's average weekly wage. Compensation to the dependent ends once the dependent remarries or dies and the compensation will never pay out for a period any longer than 500 weeks. Death benefits to 2 or more dependents are 66 2/3% of the deceased employee's average weekly wage. The compensation must be paid to the widow/-er, if any. The proportion of benefits for any partial dependent to benefits for all dependents must equal the proportion of wages the deceased employee gave the partial dependent to the partial dependent's total income. Compensation to a dependent ceases when the dependent marries. If an employee dies and the employer is liable, the employer must pay a lump sum of $7,500 to the deceased employee's estate within 60 days. Dependents The following persons are presumed to have been wholly dependent upon an employee whose death is compensable: The employee's children who are under 18 years of age, handicapped, or both The employee's spouse, unless they were voluntarily separated, and the spouse did not support the employee for over 12 months before the employee's death, or both A child over 18 who is mentally or physically unable to support themselves is also considered a dependent Compensation for death must be paid, respectively, to the employee's total dependents (i.e. wife, child, husband, mother, father, grandmother, grandfather, sister, brother, mother-in-law, and father-in-law). Any total dependent regularly supported by the deceased employee is considered a partial dependent. This does not affect the order in which compensation is paid.

Termination

When an insurance company terminates an agency contract or a producer's appointment, the insurer must follow the terms of the agency contract. An insurer must notify the Commissioner within 30 days after terminating a producer's appointment. The insurer must also send the producer a copy of the termination notice within 15 days after sending the notice to the Commissioner. A producer may file written comments about the termination with the Commissioner and the insurer within 30 days after receiving the notice. The Commissioner, an insurer, and a producer, in the absence of actual malice, may not be held liable for making information available to regulatory or law enforcement agencie

Appointment and Termination

Appointment To be appointed to an insurance company a producer must: Be licensed for a line of insurance to solicit or negotiate that line of insurance Be appointed by an insurer in order to act on its behalf Note A producer is not required to be appointed by an insurer if he/she is not acting on an insurer's behalf. An insurer accepting business from a person it has not appointed and who is not licensed for that line of insurance may be fined up to 3 times the premium received. A licensee regularly placing insurance with an insurer without being appointed by the insurer may have his/her license suspended or revoked. If this happens, the license may not be reinstated for at least 1 year. An insurer appointing a producer must file a Notice of Appointment with the Commissioner and pay the appropriate fee within 15 days after executing the agency contract or accepting the producer's first insurance application, whichever happens first. The Commissioner must verify that the producer is eligible for appointment within 30 days after receiving the notice. If the Commissioner determines that the producer is not eligible, he/she must notify the insurer within 5 days after making that determination. An insurer renewing a producer's appointment must pay the required renewal fee.

Auto Policies (continued)

Automobile Assigned Risk Plan An insurer cancelling an auto policy, other than for nonpayment of premium, must notify the named insured that he/she might be eligible for insurance through the Automobile Assigned Risk Plan. This is generally available to drivers who are unable to obtain it through normal channels. All auto liability insurers must be a member of the Plan, which accepts applications from persons entitled to, but unable to get, auto liability policies through ordinary methods. Any applicant or insured affected by any Plan decision may appeal to the Superintendent. A person aggrieved by the Superintendent's order or act may appeal within 10 days to the appropriate court. Rate Reductions for Older Persons Auto liability rates filed with the Commissioner must reduce premiums for a primary driver age 55 or older who successfully completes an approved accident prevention course, as evidenced by a Certificate of Completion from the course's sponsor. To qualify for this premium reduction, an individual age 55 or older must complete 8 classroom hours in an approved auto accident prevention course. The reduction must be effective for 3 years, unless the insured is involved in an at-fault accident or is found guilty of a moving violation.

Surplus Line Insurance

Conditions for Procuring Coverage If certain insurance coverage cannot be procured from authorized insurers, such coverage (a.k.a. surplus lines) may be procured from unauthorized insurers. One of the following requirements must be met: The insurance must be procured through a licensed surplus line broker, who first makes a diligent effort to get the insurance from authorized insurers. The insurance may not be procured solely to secure a lower premium. Insurance must be for an industrial insured—an insured having at least 25 employees, one of whom is a full-time insurance consultant, manager, or buyer, and annually paying premiums on all risks, except Workers' Compensation and group insurance, of at least $25,000 Broker's Affidavit A surplus line broker must file a report with the Commissioner within 30 days after the effective date of any surplus line insurance. The Commissioner may require the report to be in the form of an affidavit. Endorsement of Contract A surplus line contract must: Be initialed by, or bear the name and license number of, the procuring broker Bear a stamp stating, "This contract is registered and delivered as a surplus line coverage under the Alabama Surplus Line Insurance Law."

Strengthen Alabama Homes - Windstorm Damage Mitigation Information (continued)

Bronze is the foundation of every level of the Fortified Home program, with the focus of strengthening the roof system and keeping water out of the house. The roof system must be addressed before any other levels are achieved and sealing the roof is critical. This can be applied to either new or existing homes, when a homeowner is reroofing or when a home has an existing roof in good condition. Although not as effective as re-roofing, it is possible to obtain a Fortified Bronze designation for an existing roof. Typically this is appropriate when the home has a relatively new roof or has an expensive roof covering with a long life expectancy under normal conditions. This is accomplished by improving the roof sheathing attachment and providing a barrier from the inside to help resist water intrusion. When a new roof is installed, the roof deck is attached using mechanical fasteners and a qualified system seals the roof deck on the exterior surface Silver and Gold levels (Fortified Home Hurricane and High Wind standards) The Fortified Home Silver designation requires completion of all Fortified Bronze upgrades, plus all of the following:Gable end walls on gables greater than 48 inches must be bracedPorches and carports must have adequate connections for uplift pressures based on site design wind speed and exposure categoryConnections must be provided from the roof framing to the beam/wall, from beam to column and column to structure belowGarage doors must be pressure rated for pressures associated with site design wind speed and exposure categoryAll window, exterior door and skylight openings must be protected with qualified opening protection systemsQualified openings protection systems must have passed an ASTM E 1996 and E 18866 impact test for large missile D The Fortified Home Gold designation requires completion of all Fortified Bronze upgrades and Fortified Silver improvements, plus all of the following:Chimneys must be adequately connected to the roof structure to resist loads based on site design wind speed and exposure categoryWindows, skylights and glass doors must be rated for the design pressures appropriate for the exposure category, wind speed, window size, and window location on the buildingA continuous load path must be designed and installed providing connection from roof to wall, wall to floor, and floor to foundationWalls must have a minimum of 7/16 inch structural sheathing (OSB or plywood)

Insurer's Authorization (continued)

Continuance and Expiration of Certificate A Certificate of Authority: Continues in force as long as the insurer is entitled and until suspended, revoked or terminated at the insurer's request Expires on May 31st unless continued by paying the continuation fee before March 1st and filing an annual financial statement May be reinstated by paying a reinstatement and a continuation fee May be amended by the Commissioner to reflect changes in the insurer's charter or powers Suspension or Revocation of Certificate The Commissioner may suspend or revoke an insurer's Certificate of Authority: As required by insurance law If the insurer no longer meets the application requirements If a foreign insurer's home state suspends or revokes its authority to transact insurance Except for insolvency, impairment, or suspension/revocation by a foreign insurer's home state, the Commissioner must notify the insurer at least 10 days before suspending or revoking its Certificate of Authority, stating the reason(s) for the suspension or revocation. Producer Required An insurer must transact insurance business through licensed insurance producers. Exceptions Producers are not required for life or disability insurance delivered and solicited outside Alabama, or for title, marine, or aircraft insurance. Retaliatory Law When another state's laws impose material obligations on Alabama insurers or producers that exceed similar material obligations imposed by Alabama, the Commissioner must impose similar obligations on the other state's insurers or producers doing business in Alabama.

Adjuster

Definition and License Requirement Adjuster - A person who, for compensation, investigates and negotiates claim settlements on the insurer's behalf. This term does not include an insurer's salaried employee or an attorney licensed in Alabama. A person must be a licensed adjuster in order to act as, or claim to be, an adjuster. The Commissioner must issue a license to each qualified person, firm, or corporation applying for an adjuster license and paying the required license fee. Each person in a licensed firm or corporation who exercises powers under the license must also hold an adjuster license. To be qualified for an adjuster license, an individual must be: At least 19 years of age An Alabama resident, or a resident of a state that allows Alabama resident adjusters to act as adjusters in that state An attorney, a licensed adjuster's full-time salaried employee, or an individual with claims handling experience, education, or training Trustworthy and of good character License Exemption for Nonresident Adjusters An adjuster sent to Alabama to investigate or adjust a particular, unique, and unusual loss is exempt from license requirements. A producer may occasionally act as an adjuster without being duly licensed. A producer's compensation may not be retrospectively reduced or increased because of losses under insurance he/she sold or serviced.

Workers' Compensation

Definitions Employee (a.k.a. Worker) - Every person serving another under any contract of hire, including aliens and minors legally working, and including employees of Tannehill Furnace and Foundry Commission. Exceptions The term does not include product demonstrators and does not include licensed real estate agents operating under a licensed broker. Injury (a.k.a. Personal Injury) - Injury by accident arising out of and in the course of employment. Note This term includes occupational diseases (e.g. carpal tunnel; occupational pneumoconiosis, which is a lung disease caused by breathing small dust particles; occupational exposure to radiation). Policy Provisions, Employer Liability, and Right to Compensation An insurer must be authorized by the Commissioner to transact Workers' Compensation insurance. Its business plan and policies must be approved by the Commissioner before use. Self-Insurance - A self-insurer must annually file evidence of compliance with liability requirements. The Commissioner may, after 60 days' notice and a hearing, revoke a self-employer's Certificate of Compliance for financial reasons, the employer's failure to pay obligations, or violation of any rule or regulation. A new certificate may be granted upon application. An employer failing to secure compensation is guilty of a misdemeanor and may be fined $100 to $1,000 in addition to being liable for twice the compensation payable for an employee's injury or death. An employee may place a lien upon any amount the insurer pays the employer. An employee may not agree to pay any Workers' Compensation costs without the Commissioner's approval. When an employer's negligence, not an employee's willful misconduct, results in the employees' compensable injury or death, the employee's representative must receive damages for the spouse and next of kin.

Bail Bonds (continued)

Entry and Return Entry in Minutes - When bail is taken in open court, it must be entered in the minutes. Bail Not Taken in Open Court - When bail is not taken in open court, it must be taken in writing, signed by the defendant and at least 2 sufficient sureties. Qualifications for Bail A person signing as surety when bail is taken must be an Alabama resident worth the bail amount. The court or magistrate, in taking bail, may allow a corporation qualified to do bonding in Alabama to execute such bail. Every bail bondsman (except a corporation) must give a bond, with a corporate surety, for $25,000 ($10,000 in Cullman County). Note The bond must be payable to Alabama and must be delivered to the probate judge in each county where the person acts as a bail bondsman. A court or magistrate may require a bail bondsman to affirm his/her qualifications under oath if the court or magistrate reasonably doubts that the bail is enough. Lunatics and Infants - Any person may post bail for an insane person or a minor. Judicial and Ministerial Officers - A judicial or ministerial officer may not: Accept bail as surety for any person tried before him/her Oblige himself/herself to release, or compel to appear, any person tried before him/her Return of Undertakings - All bail must be returned to the court clerk in the same time and manner as the return of writs of arrest. Deposit Authorized in lieu of Bail - A defendant may deposit the sum mentioned in the order with the court clerk instead of giving bail. The defendant must be released when he/she delivers a certificate of the deposit to the officer having custody over him/her. Deposit after Bail - A defendant who has given bail may deposit the sum mentioned in the order with the court clerk at any time before bail is forfeited, if he/she may be released on his/her own recognizance. Upon making the deposit, the bail is no longer required. Deposit to Satisfy a Fine - When a fine is deposited, the court clerk receiving the deposit must apply the money to satisfy the fine and must refund any surplus. Deposit of Federal or State Bonds - Negotiable U.S. or Alabama bonds deposited instead of cash must be treated in the same manner as a cash deposit.

Auto Policies (continued)

Financial Responsibility, Mandatory Coverage (continued) Registration Suspension The Department must suspend an auto's registration 45 days after notifying the owner of suspension for violating the security requirement, unless the owner provides proof of insurance within 30 days. Upon providing proof of insurance and paying the $100 fee to the Department of Revenue the suspension will be terminated. Upon the second violation within a 4-year period, the registration will be suspended for 4 months. A $200 fee is required prior to the 4-month suspension period ending and if paid within the 4 months, the suspension will be terminated after exhausting the suspension period. False Proof of Insurance If the Director determines that an auto's owner has submitted a false proof of insurance, the Department shall suspend the auto's registration. After 6 months, the owner may reinstate the registration by paying a reinstatement fee and providing proof of insurance. Class C Offenses It is a Class C: Felony to, with fraudulent intent, alter, forge, or counterfeit an insurance card to make it appear valid or to sell or make available an invalid or counterfeit evidence of insurance Misdemeanor to:Operate an auto with a suspended registration or without liability coverageFail to display, or knowingly display an invalid evidence of insurance to a law enforcement officer upon requestAttempt to register an auto subject to a notice of registration suspension

Bail Bonds

General Provisions Definitions Admission to Bail - A competent court's or magistrate's order that a defendant be discharged on bail. Taking of Bail - A competent court's or magistrate's acceptance of enough bail to ensure the defendant's appearance in court or to pay Alabama for the defendant's failure to appear. Appearance Bond - An undertaking to pay Alabama or any Alabama municipality for a released person's failure to comply with its conditions. Judicial Officer - Any supreme, appellate, circuit, district, or municipal court judge, or any Alabama court magistrate. Professional Bail Company - A person or an entity, other than a professional surety company, that, for valuable consideration, furnishes bail or becomes surety for a person on an appearance bond. Professional Surety Company - An insurer, domestic or foreign corporation, association, or surety authorized by Alabama's Department of Insurance to execute appearance bonds or bail bonds in criminal cases. Professional Bondsman - A person or producer employed by a professional surety or bail company to solicit and execute appearance bonds or bail bond business on the company's behalf. Persons Charged with Capital Offense A defendant is charged with an offense that would be considered an offense punishable by death if found guilty. The defendant would be denied bail for due to the increased risk of the defendant fleeing and escaping bail. Bail All judges or magistrates must ensure that every prisoner has an opportunity to give bail when he/she is so entitled. For a misdemeanor: Any judge or magistrate may approve a bail bond for a prisoner charged with a misdemeanor. The prisoner must be released on his/her own recognizance. Any sheriff or deputy must release a prisoner giving enough bail, which must be at least $50. When a defendant indicted with a felony fails to pay bail, the judge must endorse, on the indictment, the required bail amount. A judge receiving a bail application (a request for bail) may set the bail amount, and the sheriff may release the defendant when he/she pays that bail. Writ of Arrest A clerk issuing a writ of arrest upon an indictment must endorse an order for the sheriff to accept the defendant's bail in the amount fixed by the judge. Limitations When any circuit judge refuses a bail application, only the Court of Criminal Appeals may accept a subsequent bail application. When the Court of Criminal Appeals allows a defendant to pay bail, the court's order must state the required bail amount and require the circuit judge's court to do the same. When the Court of Criminal Appeals orders that any bail be paid to a judge, the sheriff must facilitate the payment by taking the defendant before the judge to pay the bail.

Cease and Desist Order

If someone is believed to have engaged, or to be engaging, in an unfair trade practice or prohibited activity, the Commissioner must: Notify the person that a hearing shall be held within 10 days Let the person explain, at the hearing, why a Cease and Desist Order should not be issued Issue a Cease and Desist Order if doing so is appropriate

Insurance Regulation

Insurance Commissioner Appointment and Qualifications The Commissioner of Insurance is selected based on training, experience, and capacity and is appointed by the Governor for the duration of the Governor's term of office. If the Commissioner becomes a candidate for public office or becomes a member of a political committee, he/she must immediately vacate the office of Commissioner. Powers and Duties The Commissioner's powers and duties include: Organizing and supervising the Department of Insurance Enforcing insurance law Executing agreements with federal and state governmental entities and private persons Examining and investigating insurance matters Invoking remedy for enforcing orders or insurance law The Commissioner may: Delegate powers to his/her representatives Examine the insurance affairs of any:General agent, producer, surplus line broker, solicitor, or adjusterPerson having a contractual right, or a right through power of attorney, to manage or control an insurerPerson promoting or forming a domestic insurer, insurance holding corporation, or corporation to finance a domestic insurerAttorney of a reciprocal insurerCorporation that a domestic insurer controls Hearings The Commissioner may hold a hearing for any purpose he/she deems necessary. He/she may suspend or postpone an action's effective date, pending a hearing. The Commissioner must hold a hearing if required by law, or upon written demand by a person aggrieved by any act of the Commissioner. The hearing must be held within 30 days after the Commissioner receives a demand. Penalties for Violations Each violation of insurance law is a misdemeanor punishable by a fine of up to $1,000 or imprisonment for up to 1 year and/or hard labor. This is in addition to any applicable denial, suspension, or revocation of Certificate of Authority or license.

Licensing Requirements - Obtaining a License (continued)

Licensure A producer may be licensed for one or more of the following lines of insurance: Life (and annuities) Disability (Commercial lines of) Property Surety and (commercial lines of) casualty Variable life and variable annuity products Personal lines (of property and casualty) Limited line credit Bail bond Auto Industrial (a.k.a. debit) fire Rental vehicle Any other line that state law permits A person meeting licensing requirements for a service representative must be issued a service representative license in property and casualty insurance. A producer or service representative license remains in effect unless revoked or suspended as long as the license renewal fee is paid and education requirements for resident individual producers and service representatives are met when due. A lapsed producer or service representative license may be reinstated within 12 months, by paying twice the renewal fee. A producer or service representative may request a waiver of renewal requirements if unable to comply with them due to extenuating circumstance (e.g. military duty).

License Maintenance

Licensure A producer or service representative license states the licensee's name and address, PIN, dates of issue and expiration, lines of insurance, and any other information the Commissioner deems necessary. A licensee who fails to notify the Commissioner of a change in name, mailing address, and/or email within 30 days shall be fined $50. License Revocation, Suspension, or Nonrenewal The Commissioner may suspend, revoke, or refuse to issue or to renew a license for 1 or more of the following grounds: Any reason for which the Commissioner would have refused to issue the license had he/she known of the reason Providing incorrect, misleading, incomplete, or materially untrue information in any communication to the Commissioner Obtaining a license through misrepresentation or fraud Intentionally misrepresenting an application or contract Committing any unfair trade practice or fraud Using fraudulent, coercive, or dishonest practices Demonstrating incompetence, untrustworthiness, or financial irresponsibility Improperly withholding or misappropriating any property belonging to an insurer or insured Violating insurance law or any order, subpoena, rule, or regulation of any state's insurance regulatory authority Having been convicted of a felony Having a license denied, suspended, or revoked in any other jurisdiction Forging another's name to any insurance document Using reference material when taking a licensure exam Accepting insurance business from an individual who is not licensed Failing to comply with a child support obligation or to pay state income tax

Adjuster (continued)

Maintenance of License and Records An adjuster license continues in force, until terminated, as long as renewal is requested and the renewal fee is paid on or before December 31st annually. An adjuster license may be reinstated if renewal is requested and the renewal fee is paid by the February 15th after the license expires. The Commissioner may suspend an adjuster license for up to 12 months, or may revoke or refuse to renew such license: For any reason for which the license would not have been issued For attempting to obtain the license through misrepresentation or fraud For violating any applicable insurance law or any rule, regulation, or order of the Commissioner For misappropriating or illegally withholding money or property belonging to another and received in the process of conducting business For being convicted of a felony involving moral turpitude For using fraudulent or dishonest practices or demonstrating incompetence or untrustworthiness Any party aggrieved by license suspension, revocation, or discontinuance may appeal the Commissioner's order. An adjuster must keep a public office, which may be in his/her home, and keep and maintain records of all transactions for 1 year. He/she must promptly notify the Commissioner of any change of address.

Auto Policies (continued)

Policy Cancellation/Nonrenewal Grounds An auto liability policy in effect for at least 60 days may be cancelled only for: Nonpayment of premium Material misrepresentation The insured's violation of any policy terms and conditions The named insured's failure to disclose:In an application, upon request, his/her auto accidents and moving traffic violations for the past 36 monthsNecessary eligibility or rating information Any insured's false or fraudulent claim Failing to maintain a membership, if a prerequisite to the policy's purchase, in any group or organization Any customary driver's:License suspension or revocation, or drug addiction, within 36 months before the cancellation noticeEpilepsy or heart attacks, if he/she fails to provide a physician's certification that he/she can safely operate an auto without special qualificationAccident or conviction record or condition that makes operating an auto dangerous to the publicExcessive alcohol consumptionConviction or bail forfeiture, within 36 months before the cancellation notice, for:Any felonyCriminal negligence resulting in death, homicide, or assault while driving an autoOperating an auto while intoxicated or under the influence of drugsBeing intoxicated while in, about, or having custody of, an autoLeaving the scene of an accidentStealing an autoMaking false statements in a driver's license application3 or more speeding violations in any state The insured auto's:Mechanical defect endangering public safetyUse in carrying passengers for hire or compensation (except for carpooling)Use in transporting flammables or explosivesUse as an authorized emergency vehicleChange in shape or condition that increases the risk insuredFailure to be inspected or to qualify under an inspection law. Cancellation Notice and Proof of Delivery The insurer must notify the named insured at least 20 days before cancelling an auto policy; at least 10 days, stating the reason for cancellation, if cancelling for nonpayment of premium. The notice must either state the reason(s) for cancellation or must state that the reason(s) shall be given upon the named insured's written request if the request is made within 15 days before the cancellation. Proof that a notice or explanation has been mailed constitutes proof that the notice or explanation has been given. Nonrenewal Notice - A minimum of 20 days' notice to the insured is required if the insurer chooses to nonrenew the policy upon its expiration.

Bail Bonds (continued)

Professional Surety Authorization Authorization for Professional Surety To become the surety to a bail transaction, a professional surety company must have an order granting authorization to act as surety on any bail. An order granting surety authorization is reissued annually, before January 1st, by the presiding circuit judge of the county with jurisdiction. Before the judge issues the original order, and by December 1st, a professional surety company must submit, to the judge: A copy of the company's Certificate of Authority for bail line insurance A certificate that the company is in good standing with the Department An original qualifying power of attorney it has issued, specifying any limitations and appointed producers' names A copy of each appointed producer's license, or other documentation showing that the appointed producers hold a temporary license for bail insurance An affidavit or certification by one of its licensed producers stating:That all bonds shall be executed in the company's name by the producers appointed in the qualifying power of attorneyThat all such appointed producers shall be licensed before appointmentThat no person owning or having any financial interest in any entity representing the company has been convicted of a crime of moral turpitudeThat the company does not know of any forfeitures final for more than 30 days that have not been paidThat none of the company's producers is an attorney, attorney's agent, judicial official, or bail bondsman Note This requirement decreases the possibility that confusion could arise as to who is the actual surety for an undertaking. The names and addresses of all persons, officers, employees, and producers having a financial interest in an entity representing the company, and that interest's nature and extent That, of the persons mentioned, none have violated bail law or any rules adopted by the state Supreme Court in the previous 2 years Filing of Documents A professional surety or bail company must file originals of its documents (e.g. corporate surety bonds, escrow agreements) with the circuit clerk of the county in which it intends to transact business. These documents must be approved as sufficient by the presiding circuit judge. After approval, the circuit clerk must take custody of and file the originals. These documents are public records.

Workers' Compensation (continued)

Prohibited Defenses An uninsured employer may not claim that an employee was negligent (unless the employee was guilty of willful negligence or misconduct), that a fellow employee caused the injury, or that the employee assumed the incidental risk. Exempt Persons The following are exempt from Workers' Compensation requirements: Domestic employees or farm laborers An employee whose employment is casual and not in the employer's usual trade, business, profession, or occupation Employees of an employer regularly employing fewer than 5 employees in any one business A municipality with a population of less than 2,000 A corporation's officer, if he/she elects to be exempt from coverage by filing written certification with the Department and the employer's insurer Any school board that does not have enough funds to comply Certified volunteer fire departments Any legally organized rescue squads that meet minimum personnel and equipment standards An independent contractor regularly employing fewer than 5 employees in any one business, if he/she helps construct single-family, detached residential dwellings and files an Affidavit of Exemption with the Workers' Compensation Division Limits of Immunity under Exclusive Remedy An employer, insurer, person, firm, association, trust, fund, or corporation is immune from civil, but not criminal, liability for Workers' Compensation claims. Exception A person or entity may be held civilly liable for claims based on the person's or entity's willful conduct.

Insurer's Authorization (continued)

Qualifications for Authority to Transact Insurance To qualify for and keep a Certificate of Authority, an insurer must: Be an incorporated stock or mutual insurer, a reciprocal insurer, or a Lloyd's organization Be competent, trustworthy, and experienced Be affiliated only with persons whose operations have not injured insurers, stockholders, policyholders, creditors, or the public To qualify for and keep a Certificate of Authority, a foreign insurer must maintain required reserves and must have been an insurer for at least 5 years. An insurer may not qualify for a Certificate of Authority if its voting control is held by any government agency. Certificate of Authority - Application and Issuance An insurer applying for a Certificate of Authority must file its application with the Commissioner. The application must: State the kinds of insurance to be transacted and the insurer's name and home office's address Include a copy of:The insurer's charter or articles of incorporation, bylaws, financial statement, last examination, and evidence of any required depositAn appointment of the Commissioner as the recipient of service of legal process Include, if other than a life insurer, an affidavit that it has complied with the law for the past 12 months Include, if a foreign reciprocal insurer, copies of its power of attorney or of its subscribers' agreement Include, if a foreign or alien insurer, its Certificate of Authority from its home state/country Include, if an alien insurer, a copy of its appointment and of the authority of its manager in the United States The Commissioner must issue a Certificate of Authority to any insurer meeting the application requirements. A Certificate of Authority is the property of Alabama. An insurer must promptly return an expired, suspended, or terminated Certificate of Authority to the Commissioner.

Prohibited Activities

Rebates and Other Inducements A person may not, other than as expressed in a contract, offer any valuable consideration (e.g. premium rebate, dividend favor) as an inducement to buy the contract. A named insured under a property, casualty, or surety contract may not knowingly receive any valuable consideration, other than as expressed in a contract, as an inducement to buy the contract. These prohibitions do not apply to: Property insurance covering the interests of the seller or vendor Blanket disability insurance Credit life or credit disability insurance Any individual, isolated, nonrecurring, unadvertised transaction not in the regular course of business A person may not use the word "free" to describe life or disability insurance connected with the sale of any goods, merchandise, or services. The Commissioner may, after a hearing, revoke the Certificate of Authority of any insurer and the licenses of any producer violating these requirements. Note A person is not allowed to advertise or give free insurance to induce the purchase of property. Free insurance includes insurance for which the charge is less than the cost. Charges, False Representations in Insurance Application A person may not collect a premium or charge for insurance without providing insurance. The premium collected may not exceed the premium specified in the policy. A person may not knowingly make a false or fraudulent statement or representation in an insurance application. A person failing to abide by these rules may have his/her license denied, suspended or revoked; may be convicted of a misdemeanor; may be fined up to $1,000, imprisoned for up to 1 year; or be subject to any combination of these actions. Each violation is punishable as a separate offense.

Surplus Line Insurance (continued)

Surplus Line Broker's License Must have a resident and home state Property & Casualty license. A non-resident can be licensed in Alabama if licensed as a surplus lines producer in their home state. Any resident property licensee the Commissioner deems competent by virtue of experience may be licensed as a surplus line broker for transacting surplus lines property insurance. Such a licensee must apply to the Commissioner on designated forms, pay the required license fee, and file and maintain a bond of at least $50,000. The license expires on December 31st after its issuance. A nonresident surplus line broker is deemed to have irrevocably appointed the Commissioner to receive service of legal process. Placement of Business A licensed surplus line broker may accept and place surplus line business for any duly licensed resident producer and may compensate such producer. A producer may not knowingly misrepresent any material fact to a broker.

Licensing Requirements - Obtaining a License (continued)

Temporary License A temporary producer license may be issued without an exam or prelicensing course if the Commissioner deems it necessary for servicing insurance business in any of the following cases: To the spouse or representative of a producer who dies or becomes disabled To a licensed business entity's member or employee if its designated producer dies or becomes disabled To a designee of a producer entering active service in the U.S. armed forces In any other situation, if in the public interest The Commissioner may issue a temporary producer license to an otherwise qualified applicant who has not passed the exam if the applicant is active in study, instruction, or field training approved by the Commissioner and is under an insurer's supervision. Note The application must include a Notice of Appointment from the insurer and the insurer's request for the license. The applicant must pay the appropriate license fee. A temporary license is valid for up to 6 months and may be renewed once for a producer's disabling or confining illness or injury. The temporary license's holder may receive a producer's license by passing the exam and surrendering the temporary license. The Commissioner may revoke or limit a temporary license as necessary to protect insureds and the public. Note A temporary producer can receive full commissions under a temporary license.

Insurance Guaranty Association

The Alabama Insurance Guaranty Association: Pays covered claims under property and casualty policies, except ocean marine policies, to avoid excessive delays in payment and to prevent claimants' and policyholders' financial losses due to an insurer's insolvency Helps detect and prevent insurer insolvency Proportionately assesses member insurers for the cost of such protection The Association is obligated to pay covered claims existing before an insurer's insolvency: In full under Workers' Compensation That exceed $100 and are less than $150,000 for all other coverage The Association may: Investigate, adjust, pay, and deny claims Reimburse its servicing facilities (usually member insurers) for claims paid and expenses incurred on the Association's behalf Employ persons and borrow funds as necessary Sue or be sued Negotiate and enter contracts Proportionately refund excess assessments

Prohibited Activities

The information presented in Fiduciary Duties and Commissions below applies to producers and service representatives, but not to surplus line brokers or title insurance. Fiduciary Duties All funds a producer receives are held in a fiduciary capacity (i.e. in trust); the licensee may not fail to account for and pay the funds to the person entitled to them. Commissions An insurer or producer may not pay any valuable consideration to any person for services as a producer or service representative unless the person is licensed as a producer or service representative, respectively. Doing so is punishable by a fine of 3 times the commission paid. Note The Commissioner may revoke a producer's or insurer's license for failing to pay the fine. Commissions may be paid to a temporary producer, a deceased producer's representative, or, if deferred commissions, to a person who was licensed when the commissions were earned. A producer sharing commissions with a person other than a producer licensed for the same lines of insurance may have his/her license suspended or revoked for 1 year. Financial Inducements A person may not, as an inducement to buy insurance, deliver capital, stock, shares, securities, or any contract promising returns. Doing so is punishable by license refusal or revocation. A person may not issue or deliver any life policy or annuity including language that may mislead a purchaser to believe he/she will receive something other than a policy or annuity. An insurer or producer may not deliver a life policy containing benefits in the form of "coupons" or "guaranteed annual endowment" benefits, unless separately specifying the premiums for the benefits.

Auto Policies (continued)

Uninsured/Underinsured Motorist Coverage An auto liability policy must provide or offer Uninsured Motorists Coverage unless the named insured rejects it in writing. The term uninsured auto includes autos for which: Neither the owner nor driver carries bodily injury liability insurance Any bodily injury coverage is below the required minimum limits The insurer becomes insolvent after the policy is issued The sum of all bodily injury liability coverage is less than the damages that the injured person is legally entitled to recover An injured person's recovery under Uninsured Motorist Coverage is limited to the primary coverage plus up to 2 additional coverages for additional autos covered by any one auto policy. The minimum Bodily Injury Limits are $25,000 per person and $50,000 per accident for 2 or more persons. It mirrors Alabama's required Coverage Limits. Note It is illegal to be uninsured - an uninsured motor vehicle is any vehicle that has limits of coverage under that which is required by state law. Example A vehicle with 20/40/10 would be considered to be an uninsured vehicle and illegal. Note It is not illegal to be underinsured - an underinsured motor vehicle is any vehicle that has coverage that meets Alabama required limits of 25/50 25, but has coverage in an amount less than the actual damage sustained. Example An insured may have 50/100/50 in coverage and be at fault in an accident that sustains 150,000 BI and 100,000 PD. The insured is underinsured. However, the insured is legal because they have met the legal requirements of 25/50/25.

Workers' Compensation (continued)

ompensation Benefits Total Disability - Compensation is 66 2/3% of the employee's average weekly wage, subject to a maximum and a minimum. For a temporary disability, if this amount is less than the minimum, the employee receives his/her average weekly wage. Temporary Partial Disability - Compensation is 66 2/3% of the difference between the employee's average weekly wage before and after the injury, payable for up to 300 weeks. Note If the employee leaves the employer, compensation ceases until the employee secures other employment and provides a written affidavit verifying the new compensation amount payable. Permanent Partial Disability - Compensation is 66 2/3% of the employee's average weekly wage, payable for up to a certain number of weeks based upon the disability's extent. Multiple Disabilities - If an employee suffers a temporary total disability before or while suffering a permanent partial disability caused by a different injury, the benefit period for temporary total disability may not be deducted from the benefit period for permanent partial disability. Note If the disabilities are caused by the same injury, compensation may not be paid for more than 300 weeks. An employee sustaining more than 1 injury and disability concurrently must be compensated only for the injury that entitles him/her to the largest compensation amount. An employee with a permanent disability who receives another injury is entitled to compensation only for the injury that would have resulted from the latter accident if the earlier disability or injury had not existed. An employee sustaining another injury resulting in permanent disability, after already being permanently and totally disabled from an injury sustained in the same employment, is entitled to receive compensation for permanent total disability only. An employee receiving a compensable injury, while still being compensated for a previous injury in the same employment, is entitled to compensation for both injuries only if the latter injury results in permanent disability. Rights of Employers and Employees An injured employee who refuses suitable employment loses his/her entitlement to compensation during the refusal, unless a judge finds the refusal justifiable. An employee who loses his/her employment while compensation is payable may, within 2 years, petition a court for reconsideration of his/her disability status, unless the loss of employment is any of the following: Due to an active labor dispute Voluntary and without good cause For a dishonest or criminal act concerning the work (e.g. sabotage, endangering others) For misconduct at work, after receiving a warning Because a license, certificate, permit, bond, or surety necessary for employment has been lost for a cause An employer is not obligated to continue paying compensation to an employee with a permanent total disability if he/she obtains gainful employment.