Alabama updates Risk Retention Act to satisfy NAIC
New legislature in Alabama is to bring risk retention groups established in the state up to speed with guidance set by the NAIC, subjecting them to more intense scrutiny.
Senate Bill 45, due to come into effect on 1st January, 2015, qualifies RRGs as insurers in the Alabama Business Transacted with Producer Controlled Property and Casualty Insurer Law.
One of the changes made to the Alabama Risk Retention Act in the bill will mean that RRGs will be required to file an annual financial statement with the Department of Insurance and with the NAIC.
The bill will also make amendments to the risk-based capital requirements in the Insurers Act, although this will not apply to captives or RRGs.
The legislation states that the filing should be “in a form prescribed by the NAIC and to require them to adopt governance standards relating to the board of directors, service provider contracts, written policy, and audit committee; to adopt a code of business conduct and ethics for directors, officers, and employees.”
RRGs currently already licensed in Alabama will have until 1st January, 2016, to make themselves compliant with the legislation, while any new groups are required to be compliant immediately.