SB164 Alabama 2012 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Clay Scofield
Republican
Co-Sponsors: Tom Whatley Mark Slade Blackwell
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: SB164 amends Alabama's insurance laws to broaden asset handling and investment rules for domestic insurers, including overseas investments, custodial arrangements, and exemptions for certain insiders.
What This Bill Does
It adds exemptions for certain officers, directors, committee members, and employees who handle insurer funds, allowing specific transactions and compensation under regulatory conditions. It requires insurers to keep assets in Alabama financial institutions in general, but allows deposits outside the state for safekeeping or convenient operation, and permits custodial arrangements that may segregate or mix assets with other insurers if approved by the Commissioner. It authorizes investments in securities or other investments located outside the United States or Canada, with limits by jurisdiction (based on sovereign debt ratings) and currency restrictions, and a combined foreign-investment cap of up to 20% of admitted assets. It preserves and clarifies investment limits, board oversight requirements, and recordkeeping, and imposes penalties for removal or concealment of records or assets; the act takes effect immediately after the Governor signs it into law.

Who It Affects
Group 1: Officers, directors, committee members, and employees who handle insurer funds receive new exemptions and rules governing their financial interests and compensation.
Group 2: Domestic insurers and their investment operations are affected by new asset-holding rules (in-state retention with specified exceptions), permissive out-of-state safekeeping and custodial arrangements, expanded overseas investment options with caps, and enhanced governance and recordkeeping requirements.

Key Provisions
Exemptions to prohibitions in 27-27-26 for insiders handling insurer funds; allowed ownership interests and certain compensation under Commissioner-approved exceptions.
27-27-29: in-state asset and records requirements, with specified exceptions for real property out of state, branch operations, safekeeping outside Alabama, and custodial arrangements; penalties for removal/concealment of records/assets.
27-41-5: investment/loan limits require board or authorized approval for investments exceeding 10% of admitted assets; includes specific exceptions and reporting to the board.
27-41-27: new authority to invest in foreign jurisdictions (outside US/Canada) with per-jurisdiction limits: up to 10% of admitted assets for sovereign debt designation 1; up to 5% for designations 2 or 3; up to 3% for designations 4-6; currency-denomination limits: up to 2% of admitted assets in any one foreign currency; aggregate currency-denominated investments may not exceed 5% of admitted assets; aggregate foreign investments may not exceed 20% of admitted assets; SVO designation governs valuation.
Section 2: the act becomes effective immediately after the Governor signs it.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Insurance