Senate Bill 219 Alabama 2026 Session

Summary

Primary Sponsor

Wes KitchensSenator

Republican

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

SB219 would move service contract provider registration fees from the Service Contract Revolving Fund to the Special Examination Revolving Fund, require CPI-based fee updates, transfer any unspent balances, and tighten contract disclosures and provider financial standards, effective October 1, 2026.

What This Bill Does

It requires that all service contract provider registration fees be deposited into the Special Examination Revolving Fund instead of the Service Contract Revolving Fund. It allows CPI-based adjustments to the registration fee and directs that any unencumbered and unexpended balances in the Service Contract Revolving Fund be transferred to the Special Examination Revolving Fund. It adds or clarifies rules for service contracts, including required disclosures, clear writing, cancellation rights with refunds, and a potential admin fee for cancellations. It strengthens providers’ financial stability requirements, including options for reimbursement insurance or funded reserves and security deposits, plus a net worth test of $100 million with potential parent guarantees if needed.

Who It Affects

• Service contract providers and their administrators: must pay registration fees to a new fund, face updated funding and financial stability requirements, and comply with enhanced disclosure and cancellation rules.
• Service contract holders (consumers): gain clearer contract disclosures and stronger cancellation/refund protections, but may see changes in how supervision costs are financed.

Key Provisions

• All service contract provider registration fees ($200 annually or CPI-adjusted) to be deposited into the Special Examination Revolving Fund.
• Unencumbered/unexpended balances in the Service Contract Revolving Fund must be transferred to the Special Examination Revolving Fund by October 1, 2026.
• Conforming amendments to Sections 8-32-3, 8-32-1, and 8-32-5 to reflect the new fund structure and contract disclosure requirements.
• Providers must meet financial stability requirements: option to insure obligations or maintain reserves or a security deposit; net worth of $100 million with related reporting, or guarantee by a parent company if needed.
• Service contracts must include clear disclosures, cancellation procedures, refund rules (including an unearned refund and potential 10% monthly penalty if not paid within 45 days), and other consumer protections such as 24-hour emergency services where applicable.
• Effective date of the act: October 1, 2026.

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