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AlabamaHB4152026 Regular SessionHouse

Department of Insurance; additional requirements for captive insurers specified

Sponsored By: Corley Ellis (Republican)

Enacted

Insurance

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 0 benefits, 4 costs, 0 mixed.

Annual financial reviews for captive insurers

Beginning June 1, 2026, captive insurers must file an audited financial report by June 30 each year. It covers the previous calendar year ending December 31 and follows U.S. generally accepted accounting principles. It must include an independent accountant’s report, financial statements, and notes. With their annual financial-condition report, captives must also file an actuarial opinion on whether loss and loss-expense reserves are adequate. The actuary must be commissioner-approved and meet national insurance-regulator qualification standards; the opinion’s format must be acceptable to the commissioner.

Captive insurers face higher capital requirements

Beginning June 1, 2026, pure, protected cell, and branch captive insurers must maintain at least $250,000 in capital and surplus. Agency, association, and industrial insured captives need $500,000; reinsurance captives and risk retention groups need $1 million. Reciprocal captives need $1 million in free surplus. The commissioner can require more, or approve different minimums where allowed, subject to required actuarial support and feasibility studies. Captives must also own an account at an approved bank or credit union with a physical Alabama location. An approved veteran-related financial institution is another option.

Stricter management rules for captive insurers

Beginning June 1, 2026, captive insurers must hire or contract with a manager meeting the commissioner’s competence and experience standards. They must also use an approved, qualified independent certified public accountant and an approved, qualified actuary. Managers—and officers or directors of management companies—generally cannot also serve as the captive insurer’s president. This limit does not apply when the management contract is with the insurer’s parent, an affiliate, or a controlled unaffiliated business. Insurers must promptly report noncompliance, and the commissioner can require removal of managers who fail to perform their duties.

Tighter licensing checks for captive insurers

Beginning June 1, 2026, captive license applicants must disclose ownership and backgrounds of directors, officers, and anyone controlling at least 10%. Applications must include a detailed operating plan, three-year financial forecasts, and a feasibility study or analysis by a qualified actuary. The commissioner can request more information about the insurer’s ability to meet policy obligations. Material changes require an updated filing for approval; insurers cannot offer additional kinds of insurance until that approval. For reciprocal captive proposals and branch licensing and continued operations, reviews must also consider managers, legal counsel, and business plans.

Sponsors & Cosponsors

Sponsor

  • Corley Ellis

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 572 • No: 4

Senate vote • 4/7/2026

Third Reading in Second House

Yes: 34 • No: 0

Senate vote • 4/7/2026

Motion to Read a Third Time and Pass - Adopted Roll Call 1204

Yes: 34 • No: 0

House vote • 3/10/2026

Motion to Adopt - Adopted Roll Call 825

Yes: 103 • No: 0 • Other: 2

House vote • 3/10/2026

Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 828

Yes: 101 • No: 2 • Other: 2

House vote • 3/10/2026

Third Reading in House of Origin

Yes: 101 • No: 1 • Other: 3

House vote • 3/10/2026

Motion to Adopt - Adopted Roll Call 827

Yes: 101 • No: 0 • Other: 4

House vote • 3/10/2026

Motion to Adopt - Adopted Roll Call 826

Yes: 98 • No: 1 • Other: 3

Actions Timeline

  1. Enacted

    4/15/2026House

  2. Signature Requested

    4/8/2026Senate

  3. Delivered to Governor

    4/8/2026House

  4. Third Reading in Second House

    4/7/2026Senate

  5. Motion to Read a Third Time and Pass - Adopted Roll Call 1204

    4/7/2026Senate

  6. Ready to Enroll

    4/7/2026House

  7. Enrolled

    4/7/2026House

  8. Reported Out of Committee Second House

    3/17/2026Senate

  9. Read for the Second Time and placed on the Calendar

    3/17/2026Senate

  10. Third Reading in House of Origin

    3/10/2026House

  11. Insurance Engrossed Substitute Offered

    3/10/2026House

  12. Motion to Adopt - Adopted Roll Call 825

    3/10/2026House

  13. Ellis 1st Amendment Offered

    3/10/2026House

  14. Motion to Adopt - Adopted Roll Call 826

    3/10/2026House

  15. Robbins 1st Amendment Offered

    3/10/2026House

  16. Motion to Adopt - Adopted Roll Call 827

    3/10/2026House

  17. Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 828

    3/10/2026House

  18. Engrossed

    3/10/2026House

  19. Read for the first time

    3/10/2026Senate

  20. Read for the Second Time and placed on the Calendar

    3/5/2026House

  21. Reported Out of Committee House of Origin

    3/4/2026House

  22. Read for the first time and referred to the House Committee on Insurance

    2/10/2026House

  23. Pending Committee Action in House of Origin

    2/10/2026House

Bill Text

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