The Alabama Captive Association’s bill to update the Alabama Captive Act has passed by a vote of 99-0 by the Alabama House of Representatives.
The bill was voted through on February 25, 2020. It had also passed unanimously in the state’s House insurance committee.
The bill updates the rules around branch captives to more closely align them with those of pure captives, reducing capital standards and expanding the use of branch captives to all lines of business
The new rules also remove a requirement for coastal homeowners captives to be fronted. Norman Chandler, the executive director of the Alabama Captive Association, described the changes for coastal homeowners and branch captives as “industry-first initiatives.”
The bill also codified a formal dormancy statute to allow captives that may cease writing business for up to five years to remain in existence. Risks that are allowed in foreign jurisdictions can also now be insured in an Alabama domestic captive.
Representative David Faulkner sponsored the bill, having also presented the previous amendment to the Alabama Captive Act in 2016.
Chandler welcomed the industry’s unanimous support by the legislature, which he said demonstrated its commitment to captives.
Alabama Captive Association, Alabama Captive Act, House of Representatives, David Faulkner, Norman Chandler, Coastal homeowners captives, Branch captives