Alabama Department of Insurance Recaps New Laws Enacted in 2016
May 25, 2016
The Alabama Department of Insurance recently published the information below on new laws enacted in the State of Alabama during its 2016 Regular Legislative Session, which adjourned Sine Die on May 4:
Department of Insurance Bills
Principle-Based Reserving
Senate Bill 169 sponsored by Senator Slade Blackwell
Act 2016-411 – effective January 1, 2017
The Principle-Based Reserving Act conforms Alabama law to the current model acts developed by the National Association of Insurance Commissioners for the Standard Valuation Law and Standard Nonforfeiture Law for Life Insurers.
Own Risk Solvency Assessment (ORSA)
Senate Bill 170 sponsored by Senator Slade Blackwell
Act 2016-386 – effective January 1, 2017
This new law requires certain insurance companies to issue their own assessment of current and future risks through an internal risk assessment process, thus allowing the regulator to form an enhanced view of the insurer’s ability to withstand financial stress.
Mitigation Loans by Premium Finance Companies
Senate Bill 353 sponsored by Senator Bill Hightower
Act 2016-396 – effective August 1, 2016
The new law authorizes Premium Finance Companies to provide wind mitigation construction financing, subject to approval by the Commissioner of Insurance.
Other Insurance Legislation
Amendments to Section 8-32-2 – Service Contracts Definitions
House Bill 7 sponsored by State Representative Mike Hill
Act 2016-101 – effective July 1, 2016
Amendments to Section 8-32-2, Code of Alabama 1975 regarding service contract benefits define the term “road hazard” and specifies the damages caused by a road hazard that would be covered by a service contract.
Adjuster License, Exam Exemption for Staff Adjusters
House Bill 97 sponsored by State Representative Joe Faust
Act 2016-341 – effective May 11, 2016
Amendment to Section 27-9A-9 regarding the independent adjuster license examination requirements provides an exception for certain former staff adjusters.
Title Agent License, license exemption for licensed Attorneys
House Bill 129 sponsored by State Representative Jim Hill
Act 2016-296 – effective May 10, 2016
Exempts attorneys licensed by the Alabama State Bar Association for licensing as a title insurance agent.
Captive Insurance Companies.
House Bill 270 sponsored by State Representative David Faulkner
Act 2016-191 – effective July 1, 2016
Revises several provisions in Chapter 31B relating to Captive Insurers.
Insurer Delinquency Provisions for insurer members of Federal Home Loan bank.
House Bill 370 sponsored by State Representative A.J. McCampbell
Act 2016-367 – effective August 1, 2016
Provides provisions specific to federal home loan banks and insurer members of those banks in insurer delinquency proceedings.
Insurance Coverage for Transportation Network Companies.
Senate Bill 262 sponsored by Senator Shay Shelnutt
Act 2016-409 – effective August 1, 2016
Provides certain insurance requirements for a transportation network company that operates in Alabama and requires certain disclosures regarding insurance coverage and limits of liability.
Payment of Health Care Services through Automated Clearing House Network – adds Section 27-1-17.1.
Senate Bill 291 sponsored by Senator Quinton Ross
Act 2016-320 – effective May 10, 2016
Requires health care contracts issued, amended or renewed on and after January 1, 2017 between a health insurers and a covered health care provider to include specific language stating that a provider’s request for payment using a transfer of electronic funds through the automated clearing house network be honored; and to allow use of alternate electronic funds transfer methods.
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