A new Alabama insurance regulation, issued February 9 and circulated February 12, by the Alabama Commissioner of Insurance, takes effect February 19, 2026, creating defined circumstances in which a “lead state commissioner” may exempt an ultimate controlling person from filing the annual group capital calculation, or accept a limited group capital filing in its place, under Alabama Insurance Regulation Chapter 482-1-055, Rule 482-1-055-.18.2 (Group Capital Calculation).
The rule states that the lead state commissioner may grant an exemption where an insurance holding company system meets all listed criteria. This includes having annual direct written and unaffiliated assumed premium (including international direct and assumed premium), excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $1,000,000,000; having no insurers domiciled outside the United States or its territories; having no banking, depository, or other financial entity subject to an identified regulatory capital framework; and attesting that there are no material changes in transactions between insurers and non-insurers and that non-insurers do not pose a material financial risk to the insurer’s ability to honor policyholder obligations. The same sub-$1,000,000,000 premium threshold and related structural attestations also anchor the rule’s provision allowing the lead state commissioner to accept a limited group capital filing in lieu of the full group capital calculation, subject to the additional listed criteria.
For insurers, holding company systems, and compliance teams operating under Alabama’s framework, the Alabama Commissioner of Insurance’s rule also specifies when relief may be withdrawn: even where an exemption previously applied, the lead state commissioner may require an annual group capital calculation at any time if specified conditions arise, including a Risk-Based Capital action level event under Section 27-2B-4 (or a similar standard for a non-U.S. insurer), hazardous financial condition standards under Rule 482-1-101-.03, or other “troubled insurer” qualities as determined by the lead state commissioner.
Separately, the Alabama Commissioner of Insurance’s rule defines when a non-U.S. jurisdiction is considered to “recognize and accept” the group capital calculation, and states that a list of such jurisdictions will be published through the NAIC Committee Process to assist the lead state commissioner; the regulation does not, in the provided text, specify any additional Alabama-specific implementation timeline beyond the February 19, 2026 effective date.
