8legs: State of alabama

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Alabama raises captive insurance capital minimums in new law

Alabama raised capital minimums for captive insurers under HB415, affecting various captive types.
Pure captives must now maintain $250,000 in capital, up from $100,000.
Reinsurance captives face the sharpest rise, from $10,000 to $1,000,000 minimums.
Risk retention groups are carved out as a separate category with a $1,000,000 minimum.
The act introduces two new annual reporting duties for licensed captives.
An actuarial certification of loss reserves must be filed annually by captives.
New material change notifications require timely submissions for any meaningful changes.
The commissioner now evaluates the competence of managers, counsel, and the business plan for reciprocals.
Annual audited statements must include a CPA report and notes to the financial statements.
The June 1, 2026, effective date signals immediate compliance needs for Alabama captives.
Alabama plans to strengthen its captive infrastructure with higher standards.

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