HB57 Alabama 2014 Session

Updated Feb 27, 2026

Notable

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
Summary: HB57 updates Alabama's insurance laws to bring health organizations and fraternal benefit societies into the risk-based capital framework, adds risk retention groups to insurer definitions, and imposes governance and reporting requirements on risk retention groups.
What This Bill Does
The bill aligns Alabama RBC laws with NAIC models by including health organizations and fraternal benefit societies under RBC requirements. It redefines insurers to include risk retention groups and requires risk retention groups chartered in Alabama to file annual financial statements with the Department of Insurance and the NAIC, while also mandating governance standards (board independence, an audit committee, service provider controls) and a code of business conduct and ethics. It creates a 2015 transitional RBC reporting framework for health organizations and fraternal benefit societies and strengthens supervision of producer-controlled arrangements through detailed contract and governance requirements for risk retention groups. It also adds new governance provisions for risk retention groups via 27-31A series, and expands exemptions for small insurers and health organizations under certain conditions.

Who It Affects
Risk retention groups: must file annual financial statements with the Department of Insurance and the NAIC, adopt governance standards (board independence, service provider contracts, written policy, audit committee) and a code of business conduct and ethics for directors, officers, and employees; subject to RBC planning and reporting requirements.
Health organizations and fraternal benefit societies: brought under updated RBC provisions (with a temporary 2015 transition for RBC reporting) and will be subject to applicable governance, reporting, and regulatory actions under the revised framework.

Key Provisions
Includes health organizations (e.g., health care service plans, HMOs, dental service organizations) and fraternal benefit societies under the RBC framework and aligns their RBC requirements with NAIC models.
Amends the definition of insurer to include risk retention groups, and extends RBC requirements to cover those groups.
Requires risk retention groups chartered and licensed in Alabama to file an annual financial statement with the Department of Insurance and the NAIC using NAIC-prescribed forms (and electronic formats if required), and to adopt governance standards (board of directors, service provider contracts, written policy, audit committee) plus a code of business conduct and ethics for directors, officers, and employees.
Adds Section 27-2B-14.1 providing a 2015 transitional RBC reporting framework for health organizations and fraternal benefit societies with specific rules about regulatory action levels and required actions during that year.
Reforms producer-controlled and related contracting practices for risk retention groups by updating sections 27-6B-2 and 27-6B-4 to require detailed contracts, independent audit committees, controls on related-party transactions, and governance standards with independent directors; includes ongoing oversight of service providers, underwriting standards, and compensation arrangements.
Adds governance standards for risk retention groups (27-31A-3.1) requiring independent directors, annual disclosure of independence, governance policies, and an annual code of conduct and ethics for directors, officers, and employees, with provisions for audit committees and reporting.

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 Department