The Alabama Captive Association’s bill to update the state’s captive legislation was passed by a vote of 99-0 by the house of representatives on 25 February 2020.
The bill is sponsored by state representative David Faulkner, who also presented the previous amendment to the Alabama Captive Insurers Act in 2016.
Under the new bill, branch captive requirements will be revamped to more closely match those of pure captives.
Multi-state and multi-national organisations will also be able to better manage Alabama risks by making capital standards more reasonable expanding the use of branch captives to all lines of business.
Additionally, the bill will remove the requirement for coastal homeowners captives to be fronted.
The codification of a formal dormancy statute, that follows existing practice, to allow captives to cease writing business for up to five years to remain in existence.
Clarification on risks allowed in a foreign jurisdiction may now be insured in domestic captive.
Executive director of the Alabama Captive Association, Norman Chandler, said: “We are excited that captive legislation in Alabama continues to have unanimous support by the legislature. This shows the great commitment to captives. Alabama also continues its industry-first initiatives in-branch captives and in coastal homeowners captives.”
