HB506 Alabama 2018 Session

Summary

Primary Sponsor

Kerry Rich

Republican

Session

Regular Session 2018

Title

Insurance companies, corporate governance, required to provide Commissioner of Insurance annually, Corporate Governance Model Act enacted, Secs. 27-29B-1 to 27-29B-9, inclusive, added

Summary

HB506 would require Alabama-domiciled insurers to annually disclose their corporate governance practices to the state Commissioner of Insurance, using a framework modeled after the NAIC Corporate Governance Model Act, with disclosures kept confidential.

What This Bill Does

Insurers domiciled in Alabama must file a Corporate Governance Annual Disclosure (CGAD) by June 1 each year, and if part of an insurance group, file with the group’s lead state under NAIC procedures. The CGAD describes the insurer’s governance structure, policies, and practices and is prepared consistent with the NAIC model. The information is confidential and privileged, the department may request additional material, and data may be shared with NAIC, other regulators, and third-party consultants under confidentiality; late filings can incur penalties.

Who It Affects

• Insurers domiciled in Alabama: must prepare and file the annual CGAD and face potential penalties for late submissions.
• Insurance groups that include Alabama insurers: CGAD may be filed at the group level with the lead state and must indicate the level of reporting chosen, with possible changes explained.
• Alabama Department of Insurance and its staff: receive and review CGADs, maintain confidentiality, and may share with NAIC and other regulators under strict confidentiality; may request additional information.
• NAIC, other regulators, and third-party consultants: may review or receive CGAD information under confidentiality agreements and must maintain that confidentiality; data handling is governed by these agreements.

Key Provisions

• Adds Chapter 29B to Title 27 to require annual CGAD filings by insurers domiciled in Alabama.
• CGAD is due by June 1 each year; if part of an insurance group, filing is made with the lead state for the group under NAIC procedures; CGAD must align with NAIC’s model regulation.
• CGAD must include a signature from the insurer’s CEO or corporate secretary and may be completed at the level of the ultimate parent, intermediate holding company, or individual entity, with the level reported and any changes explained.
• CGAD information is confidential and privileged and not subject to open records or subpoena, though it may be shared with NAIC, other regulators, and third-party consultants under strict confidentiality controls; ownership remains with the Department of Insurance.
• The Department may retain third-party consultants (at the insurer’s expense) to assist in reviewing the CGAD; consultants must sign confidentiality and conflict-of-interest provisions, and information-sharing agreements must protect confidentiality and limit use.
• Penalties for failing to timely file the CGAD: $1,000 per day, up to a maximum of $100,000, with possible reduction for financial hardship.
• Effective date: January 1, 2020.

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