A bill to update the Alabama Captive Insurers Act has passed unanimously in the state’s House insurance committee in a move authorities hope will lead to growth of the captive industry in Alabama.
HB220, the bill that was sponsored by the Alabama Captive Association (ACA), passed on February 19, 2020. It will increase flexibility and innovation within the captive industry in Alabama, allowing multi-state and multi-national organisations to better manage their Alabama risks in Alabama.
HB220 will relax capital standards for branch captives, aligning them with other pure captives under the Alabama law and expand their use to new lines of business. Currently branch captives are only allowed to write employee benefits in Alabama.
The changes also codify a formal dormancy statute, allowing captives to cease writing business for up to five years while remaining in existence.
Technical corrections to the language of the captive regime also introduced greater consistency between chapter 31(B) and 31(C) of the code, removing the requirement that coastal captive coverages be fronted through an admitted traditional carrier.
The bill was presented by state representative David Faulkner, who also presented the previous amendment to the Alabama Captive Insurers Act in 2016, which was also sponsored by the ACA.
Norman Chandler, executive director of the ACA, called the changes to the branch captive regime “industry-first initiatives” that “will allow domestic, foreign and alien businesses to insure their Alabama risks in an Alabama branch captive.”
Alabama Captive Insurers Act, Alabama Captive Association, Norman Chandler, David Faulkner