At its core, the bill raises the floor on how much capital captive insurers need to keep on hand. Pure captive insurance companies, previously required to maintain $100,000 in unimpaired paid-in capital and surplus, must now maintain $250,000 – or an alternative amount the commissioner sets with actuarial backing. Protected cell captive insurance companies face the same increase, from $100,000 to $250,000, with the same commissioner discretion. The most dramatic jump belongs to reinsurance captive insurance companies, whose minimum shoots from $10,000 to $1,000,000, with no room for the commissioner to set a lower alternative. Risk retention groups, previously bundled with association captives at $500,000, are now carved out into their own category at $1,000,000, or another amount the commissioner sets with actuarial backing. Capital thresholds for agency captives, association captives, industrial insured captives, and branch captives remain where they were.
Alabama raises captive insurance capital minimums in new law
