Captive Companies Could Compete for Coastal Business in Alabama

The Alabama Legislature has passed a bill that will allow captive insurance companies to sell residential insurance along the Alabama coast.

The House and Senate voted without dissent May 8 to give final approval to changes in the bill sponsored by Republican Sen. Ben Brooks of Mobile. Brooks said the bill should create and encourage competition in the homeowners’ insurance business along the coast because companies have cut back coverage since Hurricanes Ivan and Katrina.

A captive insurance company is a closely held insurance company that might be organized around a particular city or a group of condominiums.

Brooks was sponsoring another bill to expand Alabama’s insurance pool coverage for coastal residents. That bill passed the Senate but died in a House committee.