Key Takeaways
- The Alabama Department of Insurance (ALDOI) regulates all P&C insurance activities under the Alabama Insurance Code
- The Commissioner of Insurance is appointed by the Governor and serves at the Governor's pleasure
- Alabama uses a prior approval rate system for most personal lines, including auto and homeowners
- ALDOI has authority over licensing, rate review, market conduct, and consumer protection
- All insurance license applicants must pass a state exam and complete pre-licensing education
Last updated: January 2026
Alabama Department of Insurance (ALDOI)
national Property & Casualty exam preparationFree exam prep with practice questions & AI tutor
The Alabama Department of Insurance (ALDOI) is the state agency responsible for regulating the Property & Casualty insurance industry in Alabama.
The Commissioner of Insurance
The Commissioner of Insurance is:
- Appointed by the Governor
- Serves at the Governor's pleasure (no fixed term)
- Responsible for enforcing the Alabama Insurance Code
- Authorized to adopt regulations, review rates, investigate violations, and discipline licensees
Commissioner Powers for P&C Insurance
| Power | Description |
|---|---|
| Licensing | Issue, suspend, and revoke producer licenses |
| Rate Review | Prior approval for personal lines |
| Market Conduct | Examine insurer business practices |
| Enforcement | Investigate and prosecute violations |
| Consumer Protection | Handle complaints and protect policyholders |
| Rulemaking | Adopt rules interpreting the Insurance Code |
Alabama Rate Regulation
Alabama uses different rate systems for different lines:
Rate Systems by Line
| Line of Insurance | Rate System |
|---|---|
| Personal Auto | Prior approval |
| Homeowners | Prior approval |
| Commercial Lines | File and use |
| Workers' Compensation | NCCI rates with state oversight |
Prior Approval System
Under Alabama's prior approval system:
- Rates must be submitted to ALDOI before use
- ALDOI has 30-60 days to approve or disapprove
- Rates must not be excessive, inadequate, or unfairly discriminatory
- Insurers cannot use rates until approved
Exam Tip: Alabama uses prior approval for personal lines, unlike Texas which uses file and use.
Loading diagram...
Test Your Knowledge
How is the Alabama Commissioner of Insurance selected?
A
B
C
D
Test Your Knowledge
What rate system does Alabama use for personal auto insurance?
A
B
C
D
Test Your Knowledge
Which agency regulates insurance in Alabama?
A
B
C
D