HB189 Alabama 2012 Session

Summary

Primary Sponsor

Mike Hill

Republican

Session

Regular Session 2012

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

Summary

HB189 updates how Alabama domestic insurers handle assets and investments, including in-state custody, safekeeping outside the state, custodial arrangements, and foreign investments with regulatory limits.

What This Bill Does

The bill changes rules about where insurers must keep assets (primarily in Alabama, with certain exceptions for safekeeping and operations). It allows custodial arrangements for holding securities and permits safekeeping outside the state under commissioner rules. It authorizes investments in securities located in countries other than the United States or Canada, with strict percentage limits by jurisdiction and currency, and an overall aggregate cap. It also provides exemptions for certain officers and directors from prohibitions on pecuniary interests, imposes penalties for removing or concealing records, and requires board approval for investments over 10% of admitted assets.

Who It Affects

• Domestic insurers and the officers, directors, committees, or employees charged with investing insurer funds, who gain exemptions from certain prohibitions and are subject to asset custody, safekeeping, and investment rules (including foreign investments).
• The Alabama Department of Insurance and its Commissioner, who will oversee approvals of custodial arrangements, enforce record-keeping and penalties, and set rules related to these investments.

Key Provisions

• Exemptions to prohibitions in 27-27-26 for certain officers, directors, committee members, or employees who handle insurer investments.
• Domestic insurers must maintain assets in Alabama financial institutions, with specified exceptions for real property outside Alabama and operational needs of branches/offices outside the state.
• Permits deposits and transmissions of funds/assets outside Alabama for safekeeping or convenient operation, and allows custodial arrangements for securities (segregated or commingled) with Commissioner approval.
• Executive offices outside Alabama may be permitted, with records of assets/transactions kept there but accessible to the Alabama Commissioner.
• Removal or concealment of records/assets from Alabama is a felony with penalties; exemptions apply only under approved plans or mergers.
• Board-level approval is required to invest or loan more than 10% of admitted assets, with such actions recorded and reported.
• Insurers may invest in foreign country securities, subject to detailed limits by jurisdiction, currency, and aggregate limits (up to 20% of admitted assets).
• Additional foreign-investment allowances exist for insurers doing business abroad, including specific conditions on currency-denominated investments and hedging.
• Use of clearing houses or book-entry systems to evidence asset ownership is permitted.

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