Starting February 19, 2026, a new insurance regulation in Alabama will give certain insurance groups the option to skip or simplify their annual group capital calculations. This update comes from the Alabama Commissioner of Insurance and focuses on easing reporting rules for some holding company systems.
Under the new rule, a “lead state commissioner” can excuse an ultimate controlling person from submitting the usual detailed capital calculation if the insurance group meets certain conditions. To qualify, the group must have less than $1 billion in annual direct written and unaffiliated assumed premiums, without considering premiums reinsured by the Federal Crop Insurance Corporation or the Federal Flood Program. Additionally, none of the insurers should be based outside the United States or its territories, and the group must not have any banking or financial entities regulated under specific capital frameworks. The group also needs to confirm there haven’t been significant changes in transactions between insurers and non-insurers, and that these non-insurers don’t pose a financial threat to meeting policyholder obligations.
If these criteria are met, the lead state commissioner can also accept a limited or simplified group capital filing instead of the full, detailed report. However, this relief isn’t permanent. The commissioner can require a full report at any time, especially if certain financial warning signs appear, such as a Risk-Based Capital action level event or other signs of financial trouble.
The regulation also explains how to recognize non-U.S. jurisdictions that accept similar group capital calculations. A list of these jurisdictions will be shared through the National Association of Insurance Commissioners’ (NAIC) committee process to help the lead state commissioner make informed decisions.
This change aims to reduce the reporting burden on smaller, straightforward insurance groups while maintaining safeguards for the overall financial health of insurers operating in Alabama. The rule was issued on February 9, shared publicly on February 12, and takes effect a week later, on February 19.