HB370 Summary

• Adds Section 5-8A-24.1 to Alabama Code to establish provisions governing federal home loan banks (FHLBs) and their insurer members during delinquency proceedings.

• Prohibits receivers from voiding transfers or collateral pledges made by insurer members in connection with FHLB security agreements made in ordinary course of business, except transfers made with actual intent to defraud creditors.

• Requires FHLBs to repurchase excess capital stock beyond minimum required holdings when exercising rights over collateral of a delinquent insurer member, subject to applicable laws and capital regulations.

• Mandates FHLBs provide receivers a process and timelines within 10 business days for releasing excess collateral and paying member fees, and offer options to renew or restructure advances to defer prepayment fees.

• Prevents FHLBs from being stayed or prohibited from exercising collateral rights after the seventh day following commencement of a delinquency proceeding involving an Alabama-domiciled insurer member; effective three months after passage.