House Bill 415 Alabama 2026 Session

Summary

Primary Sponsor

Corley EllisRepresentative

Republican

Session

2026 Regular Session

Title

Department of Insurance; additional requirements for captive insurers specified

Summary

HB415 would tighten Alabama's captive insurer rules by mandating state-bank transfers, commissioner-approved management and professionals, expanded disclosures, higher capital and premium taxes, and new annual audit and actuarial reporting requirements.

What This Bill Does

If enacted, the bill would require captive insurers to use a bank located in Alabama for transfers and to hire or contract with a commissioner-approved manager, a commissioner-approved CPA, and a commissioner-approved actuary. It would mandate detailed disclosures about directors, officers, and any person owning 10% or more of the company, along with a formal plan of operation, a feasibility study, and notices of any material changes. It would raise minimum capital and premium tax levels for several captive types and require annual audited financial statements and actuarial certifications of loss reserves, while directing the commissioner to consider the manager’s competence and the insurer’s business plan when evaluating whether the company promotes the general good of the state.

Who It Affects

• Captive insurance companies operating or forming in Alabama, which would face higher capital requirements, new governance and disclosure obligations, increased premiums taxes, and additional annual reporting duties.
• Banks, certified public accountants, actuaries, and other professionals contracted by captives (as well as the captive's legal counsel and registered agents) who would be subject to new state oversight and qualification requirements.

Key Provisions

• Captives must arrange with an Alabama bank to transfer money and must hire or contract with a commissioner-approved captive manager.
• Captives must employ or contract with a commissioner-approved CPA and a commissioner-approved actuary to oversee financial matters.
• Captives must submit biographical information for each director/officer and for every person owning 10% or more of the captive.
• Captives must provide a detailed plan of operation and a feasibility study, plus disclosure of ownership and beneficial ownership, and notices of material changes.
• Minimum capital and surplus levels are increased for various captive types (pure, agency, association, industrial insured, risk retention group, reinsurance, branch, and protected cell), and a reciprocal captive may require at least $1,000,000 free surplus.
• Licensed captives must annually file audited financial statements and an actuarial certification of loss reserves and loss expense reserves.
• The commissioner must consider the competence of the captive manager and legal counsel and the captive’s business plan when deciding if the company will promote the general good of the state.
• Premium tax rates are structured with tiered rates on direct premiums and reinsurance, with specific minimums, credits, and caps; some taxes apply to direct premiums while others apply to assumed reinsurance.
• A provisional license mechanism may be used for up to 60 days, with conditions and possible revocation if public interests are endangered.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance