HB552 Alabama 2015 Session

Updated Feb 24, 2026

Summary

Primary Sponsor: Ken Johnson
Republican
Session: Regular Session 2015
Title: Insurance Department and life insurance companies, Standard Nonforfeiture Law, reserves, Standard Valuation Law, Secs. 27-15-70 to 27-15-83, inclusive, 27-36A-1 to 27-36A-19, inclusive; Secs. 27-15-28, 27-36-7 repealed
Summary: HB552 updates Alabama's life insurance nonforfeiture and valuation laws to align with the NAIC model, standardize cash values, and revise reserve rules, effective January 1, 2016.
What This Bill Does
It reenacts and updates the Standard Nonforfeiture Law for Life Insurance to provide uniform minimum cash value requirements for new products, adjust acquisition expenses, and remove the exemption for group life; it also reenacts the Standard Valuation Law to make Alabama’s reserve rules substantially similar to the NAIC model and repeals two older sections. The bill creates Chapter 36A, the Standard Valuation Law, which establishes reserve valuation methods for life, annuity, and accident/health contracts, requires actuarial opinions, and introduces principles-based valuation with governance and confidentiality provisions. It also sets a timeline for adoption, allows certain transitional arrangements, and repeals conflicting laws.

Who It Affects
Policyholders and insured individuals, who would see standardized cash surrender values and nonforfeiture benefits under new policies, and group life policyholders who would no longer be exempt from nonforfeiture rules.
Life insurance companies and the Alabama Department of Insurance, which must adopt the valuation manual, perform annual actuarial opinions, implement new reserve calculations, and comply with governance, reporting, and confidentiality requirements.

Key Provisions
Reenacts and recodifies the Standard Nonforfeiture Law for Life Insurance to provide consistent minimum cash value requirements for new life insurance products, adjust acquisition expense allowances, remove the exemption for group life, and set an effective date.
Reenacts the Standard Valuation Law to align Alabama’s reserve standards with the NAIC model and repeals Sections 27-15-28 and 27-36-7.
Creates Chapter 36A (Standard Valuation Law) defining terms (NAIC, valuation manual, policyholder behavior, principle-based valuation) and establishing reserve valuation methods for life, annuity, and accident/health contracts, plus requirements for actuarial opinions and confidentiality.
Allows for principle-based valuation, corporate governance and internal control certifications, data reporting, and information sharing under confidentiality rules; includes transitional provisions and potential exemptions for certain Alabama-only product forms.
Effective date of January 1, 2016.

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