Alabama approves captive insurance law update

Alabama lawmakers have given final approval to legislation that will update the state’s 10-year-old captive insurer statute.

Under the measure, H.B. 270, approved by the Alabama Senate on a 29-0 vote Tuesday following earlier approval by the state House of Representatives, a $100,000 annual cap will be imposed on the annual premium tax that captives could be assessed.

In addition, newly formed captives would be exempt from premium taxes for one year, and risk retention groups could be formed in the state.

The legislation provides “a much-needed update to our state’s captive law,” said a spokesman for the Alabama Department of Insurance in Montgomery.

The bill, which Gov. Robert Bentley is expected to sign, is the first major overhaul of the state’s 2006 captive law.

At year-end 2015, Alabama had 42 captives.