SB45 Alabama 2014 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Mark Slade Blackwell
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: SB45 updates Alabama's insurance RBC framework to include health organizations and fraternal benefit societies, adds risk retention groups to insurer definitions, and imposes governance and ethics requirements for these insurers.
What This Bill Does
The act makes health organizations and fraternal benefit societies subject to the Risk-Based Capital rules the same way property and casualty insurers are. It expands the definition of insurer to include risk retention groups (RRGs) and requires RRGs chartered or licensed in Alabama to file annual financial statements with the Department of Insurance and the NAIC, plus governance standards and a code of conduct. It adds governance requirements for RRGs, including majority independent directors on the board, an audit committee, and mandated contract and disclosure rules, and it updates related laws and RBC reporting provisions for health organizations and fraternal benefit societies. It also tightens producer-controlled arrangements and extends various health insurance requirements to entities created under the act, with an effective date of January 1 following enactment.

Who It Affects
Insurance companies, health organizations (such as health care service plans, HMOs, dental service organizations), and fraternal benefit societies in Alabama, who would be subject to RBC requirements and clarified insurer definitions.
Risk retention groups chartered or licensed in Alabama, which would must file annual financial statements with the Department of Insurance and the NAIC and comply with governance, ethics, and reporting standards (board independence, audit committee, service-provider contracts, etc.).

Key Provisions
Includes health organizations and fraternal benefit societies under RBC requirements and treats them like property and casualty insurers for RBC applicability.
Adds risk retention groups to the definition of insurer.
Requires Alabama-chartered/licensed RRGs to file an annual financial statement with the Department of Insurance and NAIC, using NAIC forms.
Directs RRGs to adopt governance standards including majority independent directors, service-provider contracts, written policies, and an audit committee; requires a code of business conduct and ethics.
Adds 27-2B-14.1 to govern RBC reporting for health organizations and fraternal benefit societies with specific actions for different RBC action levels in 2015.
Amends 27-6B-2 and 27-6B-4 to regulate controlled producer arrangements with insurers, including detailed contract requirements, fiduciary handling of funds, independent directors on audit committees, and restrictions on commissions.
Amends 27-31A-3 and adds 27-31A-3.1 to require risk retention groups to file annual statements and comply with governance standards within defined timeframes.
Extends various health-insurance-related requirements to corporations created under the act, including premium taxes, minimum standards, timely payments to providers, and required coverage for specified health services.

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 Department