HB113 Alabama 2013 Session

Summary

Primary Sponsor

Mike Hill

Republican

Session

Regular Session 2013

Title

Insurance Department, casualty insurance companies, capital requirements, subject to certain action level events, Secs. 27-2B-2, 27-2B-3, 27-2B-4 am'd.

Summary

HB113 raises risk-based capital thresholds and action triggers for Alabama insurers and requires corrective plans when those triggers are hit.

What This Bill Does

The bill changes thresholds for life and health insurers to require risk-based trend testing at a higher level. It also makes property and casualty insurers subject to a company action level event when their RBC report shows certain levels, triggering a mandatory corrective process. If a company action level event occurs, insurers must file an RBC plan with detailed corrective actions and projections, and the commissioner can require revisions or declare additional regulatory actions if the plan is unsatisfactory.

Who It Affects

• Life and health insurers: face a higher threshold before a risk-based trend test could be required, and may trigger a company action level event under certain RBC levels and negative trends.
• Property and casualty insurers: face a company action level event when RBC indicates specific levels, requiring an RBC plan with corrective actions and multi-year projections, subject to commissioner review and possible regulatory action.

Key Provisions

• Amends Sections 27-2B-2, 27-2B-3, and 27-2B-4 to adjust risk-based capital (RBC) related triggers and definitions.
• Defines terms used in the RBC framework (e.g., RBC levels, RBC plan, adjusted RBC report, company action level event, regulatory action level RBC).
• Specifies that a life/health insurer may face a company action level event if total adjusted capital is at or above the company action level RBC but below a multiplier of the authorized control level RBC with a negative trend.
• Specifies that a property and casualty insurer may face a company action level event if total adjusted capital is at or above the company action level RBC but below 3.0 times the authorized control level RBC, triggering the trend test.
• Requires insurers to prepare and submit an RBC plan within 45 days of a company action level event, including action steps, financial projections for five years, key assumptions, and business risk assessments.
• Gives the commissioner authority to determine if the RBC plan is satisfactory; if unsatisfactory, allows revisions and may declare a regulatory action level event.
• Allows the RBC plan to be filed in other states with similar RBC provisions, under specified conditions.

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