On April 26, 2016, Alabama Governor Robert J. Bentley approved House Bill No. 270, which revised Alabama’s Captive Insurers Act. The revised Captive Insurers Act went into effect on July 1, 2016, and included amendments to several provisions of the act to make it easier to establish captives and provides tax-friendly measures for captives. In particular, we note that the amended act lowers capital requirements, allows captives to be formed as any form of business entity, provides for a 60-day provisional license in certain circumstances, and caps premium taxes. Under Alabama’s 2006 Captive Insurers Act, captives could only be formed as corporations. Norman Chandler, President of the Alabama Captive Association, has stated that “The newly revised Captive Act will significantly help the captive industry grow in Alabama.”
A copy of the revised Chapter 31B is available here, which shows in redline form the changes to the Act. 2016 Alabama Laws Act 2016-191 (H.B. 270).