Title 27 — Title 27

(a) A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed agent or broker acting pursuant…

This chapter shall be known and may be cited as the “Alabama Captive Insurers Act.” History: (Act 2006-509, p. 1153, §1.)

(a) At least once in three years, and whenever the commissioner determines it to be prudent, the commissioner shall visit each captive insurance company and thoroughly inspect and examine its affairs to ascertain its financial condition, its ability to fulfill its obligations, an…

(a) The license of a captive insurance company to do an insurance business in this state may be suspended or revoked by the commissioner for any of the following reasons: (1) Insolvency or impairment of capital or surplus. (2) Failure to meet the requirements of Section 27-31B-6.…

(a) An association captive insurance company, risk retention group, and an industrial insured captive insurance company insuring the risks of an industrial insured group defined in paragraph b. of subdivision (19) of Section 27-31B-2 shall comply with the investment requirements …

(a) A captive insurance company may provide reinsurance, as authorized in this title, on risks ceded by any other insurer. (b) A captive insurance company may take credit for reserves on risks or portions of risks ceded to reinsurers complying with Sections 27-5B-4 through 27-5B-…

No captive insurance company may be required to join a rating organization. History: (Act 2006-509, p. 1153, §1.)

No captive insurance company, including a captive insurance company organized as a reciprocal insurer under this chapter, may join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this state. No captive insurance company, or its insured,…

(a) Each captive insurance company shall pay to the commissioner, by March 1 of each year, a tax at the rate of four-tenths of one percent on the first 20 million dollars, three-tenths of one percent on the next 20 million dollars, two-tenths of one percent on the next 20 million…

The commissioner may establish and from time to time amend rules relating to captive insurance companies as are necessary to enable the commissioner to carry out this chapter. History: (Act 2006-509, p. 1153, §1.)

No provisions of this title, other than those contained in this chapter or referring specifically to captive insurance companies, shall apply to captive insurance companies. History: (Act 2006-509, p. 1153, §1.)

(a) Except as otherwise provided in this section, the terms and conditions set forth in Chapter 32 and Article 2, commencing with Section 27-2-50, of Chapter 2, pertaining to rehabilitation, reorganization, conservation, and liquidation of insurers, shall apply in full to captive…

As used in this chapter, the following terms shall have the following meanings, unless the context clearly indicates otherwise: (1) AFFILIATED COMPANY. Any company in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common owners…

The commissioner shall adopt rules establishing standards to ensure that a parent or affiliated company is able to exercise control of the risk management function of any controlled unaffiliated business to be insured by the captive insurance company. Until the rules under this s…

(a) An association captive insurance company or industrial insured group formed as a stock or mutual corporation may be converted to or merged with and into a reciprocal insurer in accordance with a plan therefor and this section. (b) A plan for this conversion or merger shall sa…

(a) One or more sponsors may form a protected cell captive insurance company under this chapter. (b) A protected cell captive insurance company formed or licensed under this chapter may establish and maintain one or more protected cells to insure risks of one or more participants…

Repealed by Act 2016-191, §3, effective July 1, 2016. History: (Act 2006-509, p. 1153, §1.)

(a) An association, corporation, limited liability company, partnership, trust, or other business entity may be a participant in a protected cell captive insurance company formed or licensed under this chapter. (b) A sponsor may be a participant in a protected cell captive insura…

(a) A protected cell of a protected cell captive insurance company may be formed as an incorporated protected cell. (b) Subject to the prior written approval of the protected cell captive insurance company and of the commissioner, an incorporated protected cell shall be entitled …

A stock captive insurer may become a mutual captive insurer under the plan or procedure as may be approved by the commissioner. The commissioner shall not approve any such plan, procedure, or mutualization unless: (1) It is equitable to stockholders and policyholders; (2) It is s…

(a) Notwithstanding any other method authorized by law, a foreign or alien captive insurance company may become a domestic captive insurance company by complying with all of the requirements of this chapter relative to the organization and licensing of a domestic captive insuranc…

A risk retention group formed pursuant to this chapter shall comply with any provision determined to be applicable to the National Association of Insurance Commissioners’ (NAIC) accreditation standards for Risk Retention Groups and any provision of this title determined to be app…

AMENDED BY ACT 2026-486, EFFECTIVE JUNE 1, 2026. SEE ACT FOR REVISED LANGUAGE. (a) Any captive insurance company, when permitted by its articles of association, charter, or other organizational document, may apply to the commissioner for a license to do any and all insurance defi…

(a) The commissioner shall collect the following fees in connection with Section 27- 31B-3: (1) Filing application for license, two hundred dollars ($200). (2) License fee, for initial license and each annual renewal thereof, three hundred dollars ($300). (b) All fees collected p…

No captive insurance company shall adopt a name that is the same, deceptively similar, or likely to be confused with or mistaken for any other existing business name registered in the State of Alabama. History: (Act 2006-509, p. 1153, §1.)

until June 1, 2026.] AMENDED BY ACT 2026-486, EFFECTIVE JUNE 1, 2026. SEE ACT FOR REVISED LANGUAGE. (a) No captive insurance company shall be issued a license unless it shall possess and thereafter maintain unimpaired paid-in capital and surplus as follows: (1) In the case of a p…

No captive insurance company may pay a dividend out of, or other distribution with respect to, capital or surplus, in excess of the limitations set forth in subsection (g) of Section 27-29-5, without the prior approval of the commissioner. Approval of an ongoing plan for the paym…

Act 2026-486) [Effective until June 1, 2026.] AMENDED BY ACT 2026-486, EFFECTIVE JUNE 1, 2026. SEE ACT FOR REVISED LANGUAGE. (a) A pure captive insurance company, an agency captive insurance company, a reinsurance captive insurance company, a special purpose financial captive ins…

June 1, 2026.] AMENDED BY ACT 2026-486, EFFECTIVE JUNE 1, 2026. SEE ACT FOR REVISED LANGUAGE. (a) Captive insurance companies shall not be required to make any annual report except as provided in this chapter. (b) Prior to March 1 of each year, each captive insurance company shal…

This chapter may be cited as the Alabama Coastal Captive Insurance Company Act. History: (Act 2008-391, p. 742, §2.)

For the purpose of this chapter : (1) ALABAMA COASTAL CAPTIVE INSURANCE COMPANY. A captive insurance company, as is defined by Section 27-31B-2(8), that is specifically formed to provide homeowners insurance coverage as limited in Section 27-31B-3(a)(4) and as defined and limited…

Duties. (a) An Alabama Coastal Captive Insurance Company, if permitted by its articles of incorporation or organization, operating agreements, or charter, may apply to the commissioner for a license to write homeowners insurance coverage as limited in Section 27-31B-3(a)(4) and a…

(a)(1) The commissioner may not issue a license to an Alabama Coastal Captive Insurance Company unless the company possesses and maintains unimpaired paid-in capital of not less than one million dollars ($1,000,000); however, in the case of an Alabama Coastal Captive Insurance Co…

(a) The requirements of Section 27-31B-8 apply to an Alabama Coastal Captive Insurance Company. (b) The commissioner has discretion to restrict the form of an Alabama Coastal Captive Insurance Company to one or more of the types of defined captives listed in Section 27-31B-8, and…

The commissioner, by rule, regulation, or order, may exempt an Alabama Coastal Captive Insurance Company, on a case-by-case basis, from provisions of this chapter that are determined to be inappropriate given the nature of the risks to be insured and the intent of this chapter. H…

The confidentiality provisions of Sections 27-31B-9(b) and 27-31B-10 do not extend to final reports of its financial condition produced by the commissioner in inspecting or examining an Alabama Coastal Captive Insurance Company and do not extend to reports submitted by an Alabama…

(a) An Alabama Coastal Captive Insurance Company shall include the following notice on each application form for insurance, as well as the declaration page of each policy, in no less than fourteen-point bold type: “NOTICE This policy is issued by a captive insurance company which…

The commissioner may not issue a license to an Alabama Coastal Captive Insurance Company unless the commissioner finds that the: (1) Coastal captive insurance company is capitalized adequately or properly reinsured or both, after giving due consideration to the business plan, fea…

Certification. (a) Commencing on May 14, 2009, insurance companies shall provide a premium discount or insurance rate reduction in an amount and manner as established in subsection (j) and pursuant to Section 27-31D-3. In addition, insurance companies may also offer additional ad…

Homes. (a) Commencing on May 14, 2009, insurance companies shall provide a premium discount or insurance rate reduction in an amount and manner as established in subsection (g) and pursuant to Section 27-31D-3. In addition, insurance companies may also offer additional adjustment…

Damage Requires Roof Replacement. (a) Insurance companies writing homeowners insurance shall offer a fortified bronze roof endorsement to upgrade a nonfortified home, which is otherwise eligible for a fortified standard, to a fortified standard identified in Section 27-31D-2, whe…

For the purposes of this chapter, the term insurable property includes single family residential property or commercial property. Insurable property also includes modular homes satisfying the codes, standards, or techniques as provided in Section 27-31D-1 or Section 27-31D-2. Man…

This chapter shall only apply to new insurance policies written or existing policies renewed on or after the first day of the twelfth month following May 14, 2009. History: (Act 2009-500, p. 924, §4.)

The Department of Insurance shall promulgate such rules as are necessary to implement and administer this chapter. History: (Act 2009-500, p. 924, §5.)

This chapter shall be known and may be cited as the Strengthen Alabama Homes Act. History: (Act 2011-643, p. 1638, §1.)

(a) There is established within the Department of Insurance, the Strengthen Alabama Homes Program. (b) There is established the Strengthen Alabama Homes Fund within the State Treasury for the use of the department to administer the program. (c) This chapter does not create an ent…

(a) To be eligible for a grant, residential property owners applying for a grant must have an insurable property that has been granted a homestead exemption and must be able to meet the eligibility requirements as set forth by the department for each grant type. (b) Grants to res…

(a) Notwithstanding Section 27-2-39, the Commissioner of Insurance shall transfer from the Insurance Department Fund to the Strengthen Alabama Homes Fund any amount remaining in the Insurance Department Fund on September 30, 2022, which exceeds 25 percent of the amount appropriat…

Insurable Property. (a) To perform retrofitting work on insurable property under the program, a residential property owner may hire any licensed contractor who is capable of performing work that satisfies the standards prescribed by this chapter and rules adopted by the departmen…

For the purposes of this chapter, the following terms shall have the meanings respectively ascribed to them by this section: (1) IMPAIRMENT or INSOLVENCY. The capital of a stock insurer, the net assets of a Lloyd’s plan insurer or the surplus of a mutual or reciprocal insurer sha…