AL HB391

Health care service corporations may reorganize under the ultimate control of a nonprofit holding corporation, with the reorganization treated as an internal restructuring rather than a change of control, exempting it from standard acquisition approval requirements under Sections 27-29-3 and 27-29-3.1

Initial asset transfers from the health care service corporation to the nonprofit holding corporation are capped at 25% of the corporation's admitted assets (net of liabilities) and must comply with applicable risk-based capital requirements

Directors, officers, and employees are prohibited from receiving any fee, commission, or additional compensation for aiding in a reorganization, and no equity ownership interests in the holding corporation may be granted to executive officers or board members

The nonprofit holding corporation must file an annual group capital calculation with the Department of Insurance by June 1 each year, and its board must consist solely of individuals who serve as directors of the health care service corporation

Effective date: October 1, 2026