HB85 Alabama 2016 Session

Summary

Primary Sponsor

Ken Johnson

Republican

Session

Regular Session 2016

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Valuation Law, Secs. 27-15-70 to 27-15-83, inclusive, 27-36A-1 to 27-36A-20, inclusive; Secs. 27-15-28, 27-36-7 repealed

Summary

HB85 updates Alabama's life insurance rules to align with NAIC model laws, updating cash-value guarantees and reserve rules while repealing old provisions.

What This Bill Does

It reenacts the Standard Nonforfeiture Law for Life Insurance to set consistent minimum cash value requirements for new life insurance products, adjusts the acquisition expense allowance, and removes the exemption for group life insurance. It also revises the Standard Valuation Law to make Alabama's reserve rules substantially similar to the NAIC model, including adoption of a valuation manual and standardized mortality tables and interest rates. The bill repeals Sections 27-15-28 and 27-36-7 and establishes an effective date for the act.

Who It Affects

• Life insurance policyholders in Alabama would be subject to updated minimum cash value and surrender value rules under the Standard Nonforfeiture Law, including changes for new product types and removal of the group life exemption.
• Life insurance companies, their actuaries, and Alabama regulators would need to adopt NAIC-based valuation standards, perform annual actuarial opinions, handle confidential memoranda, and comply with new reserve and reporting requirements.

Key Provisions

• Create Article 3 Standard Nonforfeiture Law for Life Insurance establishing minimum cash value requirements, paid-up nonforfeiture benefits, and cash surrender values for policies issued after certain dates, with requirements for disclosures and computations using specified mortality tables and interest rates.
• Create Chapter 36A Standard Valuation Law to adopt NAIC-style reserve valuation, definitions (including NAIC, valuation manual, policyholder behavior), and requirements for annual actuarial opinions and memoranda, confidentiality, and information sharing.
• Repeal Sections 27-15-28 and 27-36-7, and enact related changes to conform to the new nonforfeiture and valuation framework.
• Set the act’s effective date as the first day of January following its passage (and Governor approval), with operative and valuation manual provisions defined within the bill.

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