HB417 Alabama 2011 Session

Summary

Primary Sponsor

Mike Hill

Republican

Session

Regular Session 2011

Title

Insurance, domestic insurers, investments of, prohibited activities with certain exceptions, financial institutions authorized in the state in lieu of assets, except deposits for outside of state, removing or concealing assets or records, prohibited, using custodial arrangements for holding securities, prohibited, investment activities further regulated, Secs. 27-27-26, 27-27-29, 27-41-5, 27-41-27 am'd.; Act 2010-685, 2010 Reg. Sess. am'd.

Summary

HB417 would broaden and regulate how Alabama domestic insurers handle investments and assets, allowing some cross-border activities and custodial arrangements while increasing in-state asset requirements and giving exemptions to certain investment roles.

What This Bill Does

The bill provides exemptions from pecuniary-interest prohibitions for certain officers, directors, or employees who invest or handle insurer funds; it requires insurers to maintain assets in Alabama-based financial institutions, with allowances for safekeeping or convenient operation outside the state; it authorizes custodial arrangements for holding securities (segregated or commingled) with approval from the Insurance Commissioner and safeguards; and it allows investments in securities outside the United States or Canada under specific quantitative limits and currency rules, while continuing to limit investments or loans relative to admitted assets.

Who It Affects

• Domestic insurers operating in Alabama and their officers, directors, committees, or employees responsible for investing or managing insurer funds, who would receive exemptions from certain prohibitions and must follow new custody and investment rules.
• The Alabama Department of Insurance (specifically the Commissioner) and financial institutions acting as custodians or safekeepers, who would oversee and approve custodial arrangements and monitor compliance with new investment limits and safeguarding rules.

Key Provisions

• Exempt certain officers, directors, committee members, and employees charged with handling insurer funds from some pecuniary-interest prohibitions.
• Require insurers to keep assets in financial institutions that conduct business in Alabama, with exceptions for branch operations and necessary operational conveniences outside the state.
• Allow deposits or transmissions of funds/assets outside Alabama for safekeeping or convenient operation, under defined conditions.
• Permit custodial arrangements for holding insurer securities (segregated or commingled) if approved by the Commissioner and in line with safeguarding and examination rules.
• authorize investments in securities or investments located outside the United States or Canada, subject to detailed limits by jurisdiction and currency (including multiple percentage caps and hedging rules).
• Impose a general limit that investments or loans cannot exceed 10% of admitted assets unless authorized by the insurer’s board or equivalent committee, with reporting requirements; exclude certain funeral-supplies purchases for mutual aid associations.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance