The Alabama captive bill amendments passed the Alabama House chamber at the House of Representatives on 1 April with a 94-0 affirmative vote.
The amendments will now be sent to Governor Kay Ivey’s to be signed into law.
In February, the Alabama Captive Insurance Association (ACIA) pushed forward an ambitious agenda this year with what they describe as “one of the most comprehensive and aggressive captive laws in the country”.
The bill was part of the 2021 proposals and was in addition to those scheduled for 2020, which was put on hold by the state legislature due to the ongoing COVID-19 pandemic.
Last year’s changes include an expansion to branch captives and dormancy statute.
As part of the 2021 amendments, the three new alternative risk vessels will include agency captives, reinsurance captives and special purpose financial captives.
Another proposal will also allow surplus notes to be utilised in the capitalisation process, which previously was not allowed in the state. The state also put forward a new formal redomestication process.
According to the ACIA, the ability for Alabama to create captive solutions for the unique interests of captive owners, opens the door for exceptional growth in the forthcoming years.
Norman Chandler, president of ACIA, and co-author of the legislation, says: “We are excited for industry-first innovation in reinsurance and branch captives. We’ve taken a wholesale review of these types of captives and tried to bring them into the modern age with this legislation.”
Justin Law, president of ACIA and legislation co-author, notes: “The ‘legal there, insure it here’ doctrine included in this update plus the new SPFC language allows maximum creativity
and flexibility in designing an Alabama captive.”
He adds: “ACIA has expanded the capabilities of the alternative risk industry here so that we can bring more business and companies to the state of Alabama.”
