The Alabama Captive Association’s sponsored bill to update the state’s captive insurance legislation passed unanimously in the House Insurance Committee on 19 February.
The updates allow for greater economic growth and development within the captive industry in the State of Alabama.
The bill was presented by state representative David Faulkner, who also presented the previous amendment to the Alabama captive insurers act in 2016 sponsored by the Alabama Captive Association.
Under this bill, the significant changes to the Alabama captive insurers act will include rethinking the use of branch captives to allow multi-state and multi-national organisations to better manage their Alabama risks in Alabama.
The bill will also make capital standards more reasonable and in alignment with other pure captives under the Alabama law and expand the use of branch captives to other lines of business.
Additionally, it will include the codification of a formal dormancy statute, that follows the existing Alabama Department of Insurance practice, to allow captives to cease writing business for up to five years and remain in existence.
Finally, the bill will allow for technical corrections to language pertaining to coastal captive insurance companies to promote consistent language between Chapter 31(B) and 31(C) of the code. The change will also remove the requirement for coastal captive coverages to be fronted through an admitted traditional carrier.
Executive director of the Alabama Captive Association, Norman Chandler said: “We are excited to present an industry-leading update to the Alabama captive insurers act that establishes industry-first initiatives in branch captives and will allow domestic, foreign and alien businesses to insure their Alabama risks in an Alabama branch captive.”
He added: “The proposed changes will advance the State of Alabama in the captive industry and in economic development.”
