SB428 Summary

• Adds Section 27-32-27.1 to Alabama Code to establish provisions for federal home loan banks (FHLB) and their insurer members during delinquency proceedings.

• Prohibits a receiver from voiding transfers, security agreements, pledges, or collateral arrangements made by an insurer member with its FHLB in the ordinary course of business and in compliance with FHLB agreements, except transfers made with actual intent to defraud.

• Requires FHLB to repurchase excess capital stock held by a delinquent insurer member beyond the required minimum investment, subject to applicable laws, regulations, and the bank's capital plan.

• Mandates FHLB to provide a process and timelines within 10 business days of receiver request for releasing excess collateral, returning collateral after full repayment of obligations, and handling fees and account operations.

• Allows FHLB to exercise collateral rights without stay or prohibition after the 14th day of a delinquency proceeding involving an Alabama-domiciled insurer member; act becomes effective three months after passage.