House Bill 419 Alabama 2026 Session

Summary

Primary Sponsor

Artis McCampbellRepresentative

Democrat

Session

2026 Regular Session

Title

Insurance, to provide that service contract provider registration fees be paid into the Special Examination Revolving Fund instead of the Service Contract Revolving Fund

Summary

HB419 shifts service contract provider registration fees from the Service Contract Revolving Fund to the Special Examination Revolving Fund and strengthens provider financial requirements, with an effective date of October 1, 2026.

What This Bill Does

Replaces the fund that collects the annual service contract provider registration fee with the Special Examination Revolving Fund; the fee remains $200 annually and may be adjusted for CPI changes. Requires any unencumbered and unexpended balance in the Service Contract Revolving Fund to be transferred to the Special Examination Revolving Fund by October 1, 2026. Adds or strengthens financial stability rules for providers, allowing either reimbursement insurance or a combination of funded reserves, a financial security deposit, and a $100 million net worth requirement (with potential parent guarantees if needed). Requires service contracts to include specified disclosures and sets cancellation/refund rules, including voiding upon return with full refunds (including any premium), possible administrative fees, and penalties for late refunds.

Who It Affects

• Service contract providers and their administrators/sellers: must register with the commissioner, pay a $200 annual fee (adjustable by CPI), meet stronger financial stability requirements, and fund the Special Examination Revolving Fund.
• Service contract holders/consumers: gain clearer contract disclosures and defined cancellation/refund rights, including timelines and refund amounts.

Key Provisions

• Fees collected from service contract providers go into the Special Examination Revolving Fund instead of the Service Contract Revolving Fund.
• The annual registration fee is set at $200 and is adjustable under CPI changes.
• Any unencumbered/unexpended balance in the Service Contract Revolving Fund must be transferred to the Special Examination Revolving Fund.
• Providers must meet financial stability requirements, including either reimbursement insurance or a combination of reserves and deposits plus a $100 million net worth (with parent company guarantees if needed).
• Service contracts must include disclosures, claim procedures, and cancellation/refund terms, with timelines and penalties for late refunds and potential administrative fees for cancellations by the purchaser.
• Effective date of the act is October 1, 2026, with conforming changes to related code sections 8-32-1 and 8-32-5.

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