HB57 Alabama 2014 Session

Summary

Primary Sponsor

Mike Hill

Republican

Session

Regular Session 2014

Title

Insurance Department, health organizations, included in risk-based capital regulation, risk retention groups included in definition of insurers, risk retention acts, financial statements filed with commissioner, code of ethics, Secs. 27-2B-14.1, 27-31A-3.1 added; Secs. 10A-20-6.16, 22-21-374, 27-21A-23, 27-2B-2, 27-2B-3, 27-2B-4, 27-2B-7, 27-2B-10, 27-6B-2, 27-6B-4 am'd.; 27-31A-3 added

Description

Under existing law, the risk-based capital law for insurers does not apply to fraternal benefit societies or health organizations.

Under existing law, for purposes of the Alabama Producer Controlled Property and Casualty Insurer Law, insurer is defined to exclude risk retention groups.

Under existing law, a risk retention group chartered and licensed in this state is subject to certain laws relating to its formation and operation.

This bill would make Alabama’s law substantially similar to the current versions of the Model Risk-Based Capital for Insurers Act, the Model Business Transacted with Producer Controlled Property and Casualty Insurer Law, and the Model Risk-Based Capital for Health Organizations Act, all developed by the National Association of Insurance Commissioners.

This bill would amend the Alabama risk-based capital law so as to include fraternal benefit societies and health organizations, such as health care service plans, health maintenance organizations, and dental service corporations, and would subject fraternal benefit societies to the same risk-based capital requirements applicable to life and health insurers and health organizations to the same risk-based capital requirements applicable to property and casualty insurers.

This bill would amend the Alabama Producer Controlled Property and Casualty Insurer Law so as to change the definition of insurer to include risk retention groups.

This bill would amend the Alabama Risk Retention Act to require risk retention groups chartered and licensed in this state to file an annual financial statement with the Department of Insurance and with the NAIC in a form prescribed by the NAIC and in an electronic form if required by the commissioner, and would also require risk retention groups chartered and licensed in this state to adopt governance standards relating to the board of directors, service provider contracts, written policy, and audit committee, and to adopt a code of business conduct and ethics for directors, officers, and employees.

Show more Show less

Subjects

Insurance Department