HB641 Alabama 2021 Session

Summary

Primary Sponsor

Kerry Rich

Republican

Session

Regular Session 2021

Title

Insurance holding companies, regulation by Commissioner of Insurance, group capital calculation and stress test, providing for holding companies, duties to Commission and lead state commissioner, confidentiality under Regulatory Act, Secs. 27-29-1, 27-29-3, 27-29-4, 27-29-7 am'd.

Summary

HB641 would add a group capital calculation and liquidity stress tests to Alabama's insurance holding company regulation, with confidential reporting to the lead state insurance commissioner.

What This Bill Does

It requires insurance holding company systems to implement a group capital calculation that results in a group capital ratio, and to file this information according to NAIC guidelines. It also requires the ultimate controlling person of each insurer under holding company registration to file the results of a yearly liquidity stress test with the lead state insurance commissioner to help regulate the group. The bill strengthens confidentiality rules for these data, allowing sharing with regulators and NAIC-related consultants under written agreements, and limiting public disclosure.

Who It Affects

• Insurance holding company systems (two or more affiliated entities including at least one insurer) that would must perform the group capital calculation and report the group capital ratio.
• Ultimate controlling persons of insurers subject to holding company registration, who would file the liquidity stress test results for a specified year with the lead state insurance commissioner.
• The Alabama Insurance Department, the lead state insurance commissioner, group-wide supervisor, the NAIC, and designated third-party consultants who would receive and handle the confidential data under strict confidentiality rules.

Key Provisions

• Amends Sections 27-29-1, 27-29-3, 27-29-4, and 27-29-7 to incorporate group capital calculation, group capital ratio, and liquidity stress test requirements into the Alabama Insurance Holding Company System Regulatory Act.
• Introduces a Group Capital Calculation that must be performed by the insured holding company system and filed with the lead state insurance commissioner, using NAIC Group Capital Calculation Instructions to determine a group capital ratio.
• Requires an annual Liquidity Stress Test filing for the specific year’s results by the ultimate controlling person of every insurer subject to registration, to assist in group regulation of the system, in line with the NAIC Liquidity Stress Test Framework.
• Extends confidentiality to the group capital calculation, group capital ratio, liquidity stress test results, and supporting documentation, making them confidential and privileged, with regulated sharing to NAIC and third-party consultants under written agreements and under conditions that protect confidentiality; prohibits public disclosure unless necessary to serve policyholders or public interest and with insurer notice and hearing rights.
• Establishes governance for information sharing, including agreements with NAIC and consultants, ownership remaining with the commissioner, notice requirements for insurer intervention, and restrictions on dissemination or publication to prevent misleading use.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance