SB77 Alabama 2014 Session

Summary

Primary Sponsor

Mark Slade Blackwell

Republican

Session

Regular Session 2014

Title

Insurance Department, insurance holding companies, regulation further provided for, purpose to conform with National Association of Insurance Commissioners, model act, Secs. 10A-20-6.16, 27-21A-23, 27-29-1 to 27-29-7, inclusive, 27-29-10, 27-34-54 am'd.; Secs. 27-29-3.1, 27-29-6.1, 27-29-11.1 added

Summary

SB77 tightens and expands Alabama’s insurance holding company regulation to strengthen risk oversight, acquisitions review, and enforcement.

What This Bill Does

It requires a comprehensive enterprise risk assessment of the entire insurance holding company system, including risks from non-insurance affiliates, and allows the Insurance Commissioner to use consolidated public hearings for proposed acquisitions when other states’ approvals are also needed. It adds pre-acquisition notification requirements and gives the Commissioner power to disapprove acquisitions under certain conditions, and lets regulators share information and participate in supervisory colleges for insurers with international operations. It imposes new penalties for violations, including daily fines for missed registrations, civil penalties for knowingly violating the act, and criminal penalties for willful false statements, and it creates additional recovery rights for receivers of domestic insurers to recover certain distributions paid before liquidation. It extends and clarifies reporting and governance requirements within the holding company system, with an effective date of January 1, 2016 and noting constitutional exemptions for local expenditure.

Who It Affects

• Group 1: Domestic insurers in Alabama that are part of a holding company system and their policyholders, who would see stronger risk oversight, potential restrictions on acquisitions and distributions, and new reporting requirements.
• Group 2: Officers, directors, and employees of insurance holding company systems (and their parent/controlling parties), who would face new penalties, potential civil and criminal liability, and new recovery provisions in liquidation scenarios.

Key Provisions

• Requires an enterprise risk assessment of the entire insurance holding company system, including non-insurance affiliates.
• Allows the public hearing for acquisition of control to be held on a consolidated basis with hearings in other states when required.
• Requires pre-acquisition notice to the Commissioner of Insurance and authorizes disapproval of acquisitions under specified circumstances.
• Authorizes the Commissioner to participate in supervisory colleges for domestic insurers in international holding companies.
• Adds penalties: daily fines up to $1,000 for failure to file registrations (up to $50,000 total), civil forfeiture up to $10,000 per violation for knowingly improper transactions, and criminal penalties up to five years in prison or $50,000 fine for willful false statements.
• Provides recovery rights for a receiver to recover distributions or special payments made to directors, officers, or employees in the year before liquidation, with limits and exceptions.
• Notes that the bill would create a new or increased local expenditure but qualifies under constitutional exceptions; becomes effective January 1, 2016.

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