Ben Richardson, director of external affairs at the Alabama Captive Insurance Association, explains why the new legislation passed in May is transformational for Alabama as a captive domicile
What are the current trends in the Alabama captive market?
There has been strong growth in risk retention group (RRG) licensure applications. By the end of July, we anticipate that there will be approximately 17 licensed RRGs, most of which occurred in the past three years. Moreover, there has been a large spike in interest and intrigue to form new captives in Alabama.
The array of formation types and the ability to work with a strong, supportive regulatory environment provided by the Alabama Department of Insurance has made Alabama a particularly attractive market.
What will the new captive bill do for the state’s captive sector?
The new legislation passed in May is transformational for Alabama as a domicile. It permits the creation of new captive formation types while also lowering the minimum capital requirement to $100,000 for pure and protected cell captives.
With the introduction of the agency, reinsurance, and special purpose financial captive structures, captive owners can have a captive structure tailored to their specific needs. Additionally, the new legislation includes a rethinking of the branch captive model.
Captives in Alabama can now pool risks written in alien or foreign jurisdictions while removing the requirement of maintaining a principal place of business within Alabama. The legislation allows for Alabama to be on the cutting-edge as a highly competitive domicile within the captive industry while maintaining significant financial benefits afforded by a business- friendly state.
Alabama was one of the first that held an ‘in person’ captive conference after the pandemic — what can we look forward to at this year’s event?
This year, we are very excited for a much more dynamic group of attendees.
Throughout the past few years, the Alabama Captive Insurance Association (ACIA) has built strong relationships with our Department of Insurance and our state legislature, as we have worked closely with them to pass our innovative legislation.
We are excited to announce the attendance of commissioner Jim Ridling, deputy commissioner Mark Fowler, federal elected officials, and numerous state legislators.
Additionally, our general attendee representation has grown from our southeastern region to nationwide. We are looking forward to welcoming new attendees from various captive associations, captive owners and captive management firms throughout the country. We have also brought on some new programming for this year’s conference, including a golf tournament fundraiser!
Our speaker lineup will also differ from past years as we are expanding our reach to focus on emerging talent, innovative thinkers and solution-oriented executives in the captive industry.
The destination of the Grand Hotel Golf Resort & Spa in Point Clear, Alabama should be a draw for new attendees.
We are excited to work with the resort staff to host our conference and provide our attendees with a gorgeous bayside destination and all the amenities offered by the venue.
What opportunities are there for the Alabama captive market?
With the aforementioned legislation, the opportunities are endless. Alabama boasts a very supportive and forward-thinking department and association that work in lockstep to promote the best environment for the captive and alternative risk industry.
The new legislation makes Alabama a highly competitive domicile as there is a new element of versatility in selecting a captive structure that best suits the needs of captive owners, all while maintaining low costs and a very simple redomestication process. For captive owners and managers looking for a bespoke captive structure with a favourable business environment, Alabama is the place for you.
What is in store for the state’s captive market over the next 12 months?
We anticipate that there will continue to be growth in the number of RRGs starting in or redomiciling to Alabama over the next 12 months. Additionally, we anticipate that many captive owners and managers will look to utilise our new law to form new captives within Alabama.
