SB45 Alabama 2014 Session

Under existing law, the risk-based capital law for insurers does not apply to fraternal benefit societies or health organizations

Under existing law, for purposes of the Alabama Producer Controlled Property and Casualty Insurer Law, insurer is defined to exclude risk retention groups

Under existing law, a risk retention group chartered and licensed in this state is subject to certain laws relating to its formation and operation

This bill would make Alabama’s law substantially similar to the current versions of the Model Risk-Based Capital for Insurers Act, the Model Business Transacted with Producer Controlled Property and Casualty Insurer Law, and the Model Risk-Based Capital for Health Organizations Act, all developed by the National Association of Insurance Commissioners

This bill would amend the Alabama risk-based capital law so as to include fraternal benefit societies and health organizations, such as health care service plans, health maintenance organizations, and dental service corporations, and would subject fraternal benefit societies to the same risk-based capital requirements applicable to life and health insurers and health organizations to the same risk-based capital requirements applicable to property and casualty insurers

This bill would amend the Alabama Producer Controlled Property and Casualty Insurer Law so as to change the definition of insurer to include risk retention groups

This bill would amend the Alabama Risk Retention Act to require risk retention groups chartered and licensed in this state to file an annual financial statement with the Department of Insurance and with the NAIC in a form prescribed by the NAIC and in an electronic form if required by the commissioner, and would also require risk retention groups chartered and licensed in this state to adopt governance standards relating to the board of directors, service provider contracts, written policy, and audit committee, and to adopt a code of business conduct and ethics for directors, officers, and employees

Relating to insurance; to revise the Alabama Risk-Based Capital (RBC) for Insurers Act to define insurers to include fraternal benefit societies and health organizations, such as health care service plans, health maintenance organizations, and dental service corporations; to subject health organizations to the same RBC requirements applicable to property and casualty insurers; to revise the Alabama Business Transacted with Producer Controlled Property and Casualty Insurer Law to change the definition of insurer to include risk retention groups; to revise the Alabama Risk Retention Act to require risk retention groups chartered and licensed in this state to file an annual financial statement with the Department of Insurance and with the NAIC 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; to amend Sections 27-2B-2; 27-2B-3; 27-2B-4, as amended by Act 2013-194, 2013 Regular Session; 27-2B-7; and 27-2B-10, Code of Alabama 1975; to add Section 27-2B-14.1 to the Code of Alabama 1975; to amend Sections 27-6B-2 and 27-6B-4, Code of Alabama 1975; to amend Section 27-3A-3, Code of Alabama 1975; to add Section 27-3A-3.1 to the Code of Alabama 1975; and to amend Sections 10A-20-6.16, 22-21-374 and 22-21A-23, Code of Alabama 1975.