The bill HB415 amends the Code of Alabama 1975 to enhance regulatory oversight of captive insurance companies by introducing several new requirements and increasing existing capital and surplus mandates. Key insertions include the necessity for captive insurers to maintain a financial account with an Alabama-based bank or credit union, employ qualified professionals such as a captive manager and independent certified public accountant, and submit a detailed plan of operation that outlines their insurance offerings and financial statements. Additionally, the bill raises the minimum paid-in capital for various types of captive insurers, including increasing the requirement for pure captives from $100,000 to $250,000 and for reinsurance captives from $10,000 to $1,000,000. It also mandates that insurers disclose ownership information for individuals controlling 10% or more of the company and obtain commissioner approval for any material operational changes.

Furthermore, the bill revises the organizational structure and licensing requirements for captive insurance companies, allowing for various forms such as stock and mutual entities, while emphasizing the qualifications of management and legal counsel. It updates reporting requirements, mandating annual audited financial statements and actuarial certifications, and streamlines existing legal language by removing outdated references. The bill also clarifies quorum requirements for boards of directors and allows the commissioner to cancel public hearings if no requests are made. These comprehensive changes aim to ensure that captive insurance companies in Alabama are financially sound and adhere to high governance standards, with the act set to take effect on June 1, 2026.

Statutes affected:
Introduced: 27-31B-3, 27-31B-6, 27-31B-8, 27-31B-9, 27-31B-16, 27-31B-3, 27-31B-6, 27-31B-8, 27-31B-9
Engrossed: 27-31B-3, 27-31B-6, 27-31B-8, 27-31B-9, 27-31B-16, 27-31B-3, 27-31B-6, 27-31B-8, 27-31B-9
Enrolled: 27-31B-3, 27-31B-6, 27-31B-8, 27-31B-9, 27-31B-16, 27-31B-3, 27-31B-6, 27-31B-8, 27-31B-9