HB56 Summary

• Revises Alabama's Insurance Holding Company System Regulatory Act to align with the National Association of Insurance Commissioners' current model act, establishing requirements for assessing enterprise risk within insurance holding company systems including risks from non-insurance affiliates.

• Allows the Insurance Commissioner to hold consolidated public hearings with other state commissioners when approving acquisitions of control of Alabama-domiciled insurers, and requires pre-acquisition notification with authority to disapprove acquisitions under certain circumstances.

• Changes the definition of "extraordinary dividend" from the greater to the lesser of 10% of surplus or net gain from operations, establishing a 30-day notice requirement before payment and restricting extraordinary distributions.

• Authorizes the Commissioner to participate in supervisory colleges with other regulators for domestic insurers in international holding company systems to assess enterprise risk and ensures confidential treatment of information shared between regulators.

• Adds enhanced penalties including daily fines up to $1,000 (max $50,000) for filing violations, civil forfeitures up to $10,000 per violation for knowingly unreported transactions, and criminal penalties up to 5 years imprisonment or $50,000 fines for fraudulent filings; grants receivers recovery rights for distributions made one year before insolvency.