1. (1) Section 40-12-392, Code of Ala. 1975, requireslicensed motor vehicle dealers to maintain blanket motor vehicleliability insurance coverage The required insurance coveragemust be issued in the legal name of an applicant for a motorvehicle master dealer license and evidence of this insurancecoverage must be submitted with an application for a motorvehicle master dealer license.

2. (2) Each applicant for a motor vehicle master dealer license must provide the following information:

   1. (a) Evidence that the insurance policy is in thelegal name of the business identified on the licenseapplication.
   2. (b) The name, address and NAIC (National Associationof Insurance Commissioners) number of the insurance companyproviding the coverage for the license year.
   3. (c) The policy number of the insurance companyproviding the coverage for the license year.
   4. (d) Certification that applicant’s insurance will bein effect in the form of a blanket motor vehicle liabilityinsurance policy or commercial automobile liability insurancepolicy, covering all vehicles held in inventory by the licensee,whether located at a licensed location of the licensee, oroperated on any public street or highway within the State ofAlabama.

   5. (e) Evidence that the coverage amounts are no lessthan the minimum amounts set for bodily injury or death and fordestruction of property under §32-7-6(c), Code of Ala. 1975.

      (3)(a) Prior to the issuance of a motor vehicle master dealer license, the insurance coverage certified by theapplicant pursuant to paragraph 2 must be verified by theinsurance company providing coverage for the license year, orits licensed agent, either electronically or by completion andsubmission of an insurance certification form MVD-1, generatedfrom the department’s system.

   6. (b) If the verified insurance coverage policy islater cancelled, the insurance company or its licensed agentmust provide the department with notice of the cancellation.
3. (4) If an applicant for a motor vehicle master dealerlicense knowingly furnishes an insurance certificate purportinginsurance coverage which is false or nonexistent, or which theapplicant knows has lapsed prior to the application date, apenalty of $1,000.00 shall be assessed in accordance with§40-12-29, Code of Ala. 1975. Further any license issuedpursuant to an application for which this penalty has beenassessed shall be revoked in accordance with §40-12-396, Code of Ala. 1975, and the licensee shall not be considered for anotherlicense. In the event that the licensee is a designated agentand the license is revoked pursuant to this paragraph, thelicensee’s designated agent status will also be revoked.
4. (5) If a notice of cancellation of insurance is received from the insurance company or its license agent duringthe license year and the licensee does not provide proof ofinsurance coverage prior to the date of cancellation, thelicense shall be revoked. To reinstate the license, the licenseemust submit evidence of insurance as provided in this rule and anew surety bond.

Author: Don Clemons, Mike Gamble

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-12-392(a).

History: New Rule: Filed July 30, 2012; effective September 3, 2012. Amended: Filed December 19, 2012; effective January 23, 2013. Amended: Filed December 5, 2014; effective January 9, 2015. Amended: Published July 31, 2020; effective September 14, 2020.