CSSB 53(JUD): "An Act relating to regulation of risk retention or purchasing groups; to preemption of the regulation of insurance agents and insurance producers; to the general powers of the director of the division of insurance; to insurance examination hearings; to insurer certificates of authority; to annual and quarterly statements, taxes, and prohibited acts of insurers; to reinsurance credit allowed a domestic insurer; to risk based capital for insurers; to insurer assets and liabilities; to insurer investments; to insurance holding companies; to regulation, licensing, examination, and trade practices of insurance producers, managing general agents, third-party administrators, brokers, independent adjusters, and reinsurance intermediary managers; to surplus lines insurance; to criminal insurance acts; to premium increases in automobile insurance; to insurance rating; to assigned risk pools; to filing and approval of certain insurance policy forms; to required insurance coverage for acupuncture, nurse midwives' services, mammography, and phenylketonuria; to health insurance provided by small employers; to transfer of an insurer's status as a domestic insurer; to quarterly statements of benevolent associations, fraternal benefit societies, and health maintenance organizations; to reciprocal insurers; to the definition of 'member insurer' for purposes of the Alaska Life and Disability Insurance Guaranty Association; to electronic insurance data transfer and insurance funds transfer; to the definitions of 'managing general agent' and 'person' applicable to insurance law; to automobile assigned risk plans; placing a person employed by the division of insurance as an actuary or assistant actuary into the exempt service; amending Alaska Rule of Civil Procedure 45; and providing for an effective date."
00CS FOR SENATE BILL NO. 53(JUD) 01 "An Act relating to regulation of risk retention or purchasing groups; to 02 preemption of the regulation of insurance agents and insurance producers; to 03 the general powers of the director of the division of insurance; to insurance 04 examination hearings; to insurer certificates of authority; to annual and quarterly 05 statements, taxes, and prohibited acts of insurers; to reinsurance credit allowed 06 a domestic insurer; to risk based capital for insurers; to insurer assets and 07 liabilities; to insurer investments; to insurance holding companies; to regulation, 08 licensing, examination, and trade practices of insurance producers, managing 09 general agents, third-party administrators, brokers, independent adjusters, and 10 reinsurance intermediary managers; to surplus lines insurance; to criminal 11 insurance acts; to premium increases in automobile insurance; to insurance 12 rating; to assigned risk pools; to filing and approval of certain insurance policy 13 forms; to required insurance coverage for acupuncture, nurse midwives' services, 14 mammography, and phenylketonuria; to health insurance provided by small
01 employers; to transfer of an insurer's status as a domestic insurer; to quarterly 02 statements of benevolent associations, fraternal benefit societies, and health 03 maintenance organizations; to reciprocal insurers; to the definition of 'member 04 insurer' for purposes of the Alaska Life and Disability Insurance Guaranty 05 Association; to electronic insurance data transfer and insurance funds transfer; 06 to the definitions of 'managing general agent' and 'person' applicable to 07 insurance law; to automobile assigned risk plans; placing a person employed by 08 the division of insurance as an actuary or assistant actuary into the exempt 09 service; amending Alaska Rule of Civil Procedure 45; and providing for an 10 effective date." 11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 12 * Section 1. AS 21.03.010 is amended by adding a new subsection to read: 13 (c) A person who transacts insurance in this state, or relative to a subject 14 resident, located, or to be performed in this state as or on behalf of a risk retention 15 group or purchasing group formed under and in compliance with 15 U.S.C. 3901 - 16 3906 (Liability Risk Retention Act), shall comply with the provisions of this title not 17 preempted by federal law. 18 * Sec. 2. AS 21.03.060 is amended to read: 19 Sec. 21.03.060. PRE-EMPTION. The state hereby pre-empts the field of 20 regulating insurers and their managing general agents, insurance producers 21 [AGENTS], and representatives. All political subdivisions of the state, including home 22 rule boroughs or cities, are prohibited from requiring of an insurer, managing general 23 agent, insurance producer [AGENT], or representative regulated under this title an 24 authorization, permit, or registration of any kind for conducting transactions lawful 25 under the authority granted by the state under this title. 26 * Sec. 3. AS 21.06.080 is amended by adding a new subsection to read: 27 (e) If the director determines that a catastrophe has occurred in this state and 28 in good faith believes that the governor or the President of the United States has issued 29 or is about to issue a declaration of disaster, the director may take the action that the 30 director considers necessary to assure that a contract of insurance already issued will 31 be honored under the terms of the contract. Actions that the director may take include
01 emergency orders permitting the immediate licensing of adjusters to facilitate handling 02 of claims, permitting a licensee to open or close an office, permitting a licensee to 03 move or remove a record as required by the existence of the catastrophe, or permitting 04 the issuance by an insurer of checks or drafts drawn on an out-of-state bank in 05 payment of a claim. Until a declaration of the disaster has been lifted, the director 06 may take action to respond to a disaster without a hearing. An action taken under this 07 subsection may not remain in effect more than six months from the date that the 08 director determines that a catastrophe has occurred unless, after a hearing, the director 09 determines that the action is still necessary to respond to the disaster. 10 * Sec. 4. AS 21.06.120(c) is amended to read: 11 (c) In place of an examination by the director, the director may accept a full 12 report of the last recent examination of a foreign or alien insurer, certified to by the 13 insurance supervisory official of another state, territory, commonwealth, or district of 14 the United States. The director may require that the [IF] 15 (1) [THE] insurance regulatory agency conducting the examination be, 16 [WAS] at the time of the examination, accredited by the National Association of 17 Insurance Commissioners; 18 (2) [THE] examination be [IS] performed under the supervision of an 19 insurance regulatory agency accredited by the National Association of Insurance 20 Commissioners; and the supervising examiner, after a review of the examination work 21 papers and report, state [STATES] under oath that the examination and report comply 22 with the standards and procedures required by their accredited state insurance 23 regulatory agency; or 24 (3) [THE] examiner conducting the examination be [WAS] employed 25 by an insurance regulatory agency accredited at the time of the examination by the 26 National Association of Insurance Commissioners and that the examiner, after review 27 of the examination work papers and report, state [STATES] under oath that the 28 examination and report comply with the standards and procedures required by the 29 accredited insurance regulatory agency. 30 * Sec. 5. AS 21.06.150(g) is amended to read: 31 (g) The director may withhold a document, information, account, record,
01 examination, or report from the public inspection for as long as the director finds the 02 withholding is necessary to protect a person against unwarranted injury or is in the 03 public interest. The director may close an examination hearing to the public when 04 the director finds the closure is necessary to protect a person against unwarranted 05 injury or is in the public interest. The director may publish the examination report 06 or a summary of it in a newspaper in the state if the director determines that the 07 publication is in the public interest. 08 * Sec. 6. AS 21.09.110 is amended to read: 09 Sec. 21.09.110. APPLICATION FOR CERTIFICATE OF AUTHORITY. To 10 apply for an original certificate of authority an insurer shall file with the director its 11 application, [(] accompanied by the applicable fees set under AS 21.06.250, [)] 12 showing its name, location of its home office, or principal office in the United States 13 [(] if an alien insurer [)], kinds of insurance to be transacted, date of organization or 14 incorporation, form of organization, state or country of domicile, and additional 15 information that the director may reasonably require, together with the following 16 documents, as applicable: 17 (1) if a foreign insurer, a copy of its corporate charter or articles of 18 incorporation, with all amendments certified by the public officer with whom the 19 originals are on file in the state or country of domicile; 20 (2) if a reciprocal insurer, copies of the power of attorney of its 21 attorney-in-fact and of its subscribers' agreement, if any, certified by its 22 attorney-in-fact; 23 (3) a copy of its financial statement as of the preceding December 31, 24 and all subsequent quarterly financial statements, sworn to by at least two executive 25 officers of the insurer, or certified by the public insurance supervisory official of the 26 insurer's state of domicile or of entry into the United States; 27 (4) a copy of the report of last examination, if any, made of the insurer, 28 certified by the insurance supervisory official of its state of domicile or of entry into 29 the United States; 30 (5) appointment of the director under AS 21.09.180, as its attorney to 31 receive service of legal process;
01 (6) if a foreign or alien insurer, a certificate of the public official 02 having supervision of insurance in its state or country of domicile, or state of entry 03 into the United States, showing that it is authorized to transact the kinds of insurance 04 proposed to be transacted in this state; 05 (7) if an alien insurer, a copy of the appointment and authority of its 06 United States manager, certified by its officer having custody of its records; and 07 (8) if a foreign insurer, a certificate as to deposit if it is to be tendered 08 under AS 21.09.090 [; 09 (9) SPECIMEN COPIES OF POLICIES PROPOSED TO BE 10 OFFERED IN THIS STATE IF THEN AVAILABLE, TOGETHER WITH 11 PREMIUMS OR PREMIUM RATES APPLICABLE IF THEN KNOWN, OR A 12 DECLARATION THAT THE RATES AS APPLICABLE WILL BE THOSE 13 PROMULGATED BY DESIGNATED RATING ORGANIZATIONS AUTHORIZED 14 TO FILE RATES IN THIS STATE ON BEHALF OF THE INSURER OR BY THE 15 INSURER]. 16 * Sec. 7. AS 21.09.110 is amended by adding a new subsection to read: 17 (b) Policy forms and rates that require approval under AS 21.39 or AS 21.42 18 shall be submitted under AS 21.39.040(j) or AS 21.42.120(g) and may not be 19 submitted with the application for a certificate of authority. 20 * Sec. 8. AS 21.09.130(b) is amended to read: 21 (b) If not continued by the insurer, its certificate of authority shall be 22 suspended [EXPIRES] at midnight on June 30 following the failure of the insurer to 23 continue it in force. The certificate of authority shall expire on June 30 one year 24 following its suspension due to failure to continue the certificate of authority. The 25 director shall promptly notify the insurer of the occurrence of a failure that may result 26 in suspension [RESULTING IN IMPENDING EXPIRATION] of its certificate of 27 authority. 28 * Sec. 9. AS 21.09 is amended by adding a new section to read: 29 Sec. 21.09.135. VOLUNTARY SURRENDER OF CERTIFICATE OF 30 AUTHORITY. (a) A foreign admitted insurer may apply for voluntary surrender of 31 its certificate of authority and the director may accept the application, if the foreign
01 admitted insurer 02 (1) is in compliance with the applicable sections of this title, or the 03 director waives in writing each condition of noncompliance; 04 (2) provides written confirmation that obligations incurred before the 05 voluntary surrender of the certificate of authority shall be paid to guarantee funds or 06 insurance pools established by law; and 07 (3) is domiciled in a state that is 08 (A) accredited by the National Association of Insurance 09 Commissioners at the time of the request for voluntary surrender; or 10 (B) not accredited by the National Association of Insurance 11 Commissioners at the time of the request and agrees in writing to be subject 12 to 13 (i) AS 21.09.200 and 21.09.205 for a period of two 14 years, including payment of any fee related to filing information with 15 the director; and 16 (ii) any other provision of this title that may be required 17 in writing by the director and for the period of time the director may 18 specify. 19 (b) If a foreign admitted insurer who surrenders a certificate of authority 20 ceases to exist, all business written and in force relative to a risk resident, located, or 21 to be performed in this state shall be lawfully cancelled or reinsured. A reinsurance 22 agreement covering all or a part of a risk described in this subsection shall be 23 approved by the director before accepting the certificate of authority for surrender if 24 the agreement meets the following criteria: 25 (1) insurance coverage has not deteriorated from the policies existing 26 at the time of the transfer; 27 (2) the assuming insurer is of equal or better financial standing; and 28 (3) the assuming insurer is admitted to do business in this state, unless 29 this requirement is waived by the director. 30 * Sec. 10. AS 21.09.200(f) is amended to read: 31 (f) In addition to the requirements of (a) of this section, an authorized [A
01 DOMESTIC] insurer shall file its annual statement with the National Association of 02 Insurance Commissioners on electronic media acceptable to the association by the 03 due date established by the association, and shall pay the applicable filing fee. The 04 director may waive the filing requirement if the insurer only transacts business 05 in this state and only accepts risks relative to a subject resident, located, or to be 06 performed in this state. An insurer that fails to comply with this subsection is 07 subject to the penalties specified in (e) of this section, calculated from the filing and 08 fee due date established by the National Association of Insurance Commissioners. 09 * Sec. 11. AS 21.09.205 is amended by adding a new subsection to read: 10 (d) In addition to the requirements of (a) of this section, an authorized insurer 11 shall file its quarterly statement with the National Association of Insurance 12 Commissioners on electronic media acceptable to the association by the due date 13 established by the association, and shall pay the applicable filing fee. The director 14 may waive the filing requirement if the insurer only transacts business in this state and 15 only accepts risks relative to a subject resident, located, or to be performed in this 16 state. An insurer that fails to comply with this subsection is subject to the penalties 17 specified in (c) of this section, calculated from the filing and fee due date established 18 by the National Association of Insurance Commissioners. 19 * Sec. 12. AS 21.09.210 is amended by adding new subsections to read: 20 (k) If, within three years after the date the tax under this section was due, an 21 insurer discovers a mistake or misinterpretation that resulted in an overpayment of the 22 tax in an amount exceeding $250 in any one calendar year, the insurer may make a 23 written request to the director for a refund. If the director determines a valid mistake 24 or misinterpretation has occurred, the director shall refund to the insurer the amount 25 of the excess tax by granting, at the director's discretion, a monetary refund or 26 premium tax credit. A premium tax credit shall be used in the next calendar year to 27 the extent possible and any unused credit shall be paid as a monetary refund. A 28 premium tax credit may not reduce the payable tax, calculated without use of the 29 credit, to less than zero. 30 (l) A premium tax credit granted under (k) of this section may not carry over 31 as an attribute in a transaction under AS 21.69.610, 21.69.620, AS 21.78, or a similar
01 transaction entered into by a foreign insurer. 02 (m) In this section, "premium tax credit" means an amount that an insurer may 03 use as an offset against a premium tax payment. 04 * Sec. 13. AS 21.09.250 is amended to read: 05 Sec. 21.09.250. PROHIBITED ACTS. An insurer doing business in this state 06 may not make, write, place, or cause to be made, written, or placed in this state a 07 policy, duplicate policy, or contract of insurance of any kind or character, or general 08 or floating policy upon persons or property resident, situated, or located in this state, 09 from or through a [BROKER, AGENT, GENERAL AGENT, SURPLUS LINE 10 BROKER, OR] person required to be licensed who has not secured a license in this 11 state. An insurer may not pay a commission or any form of remuneration to a person, 12 firm, or organization for the writing or placing of insurance coverage in this state 13 unless that person, firm, or organization holds a license issued by the director. 14 * Sec. 14. AS 21.09 is amended by adding new sections to read: 15 Sec. 21.09.290. RISK RETENTION GROUPS. (a) A risk retention group 16 formed in this state shall 17 (1) comply with 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act); 18 and 19 (2) qualify for and hold in good standing a certificate of authority under 20 this chapter, limited to liability insurance only. 21 (b) A risk retention group shall submit with its application for a certificate of 22 authority 23 (1) the identity of 24 (A) the initial members of the risk retention group; 25 (B) all persons who organized the risk retention group; 26 (C) all persons who will provide administrative services to the 27 risk retention group; 28 (D) all persons who will influence or control the activities of 29 the risk retention group; 30 (2) the amount and nature of initial capitalization; 31 (3) a plan of operation or a feasibility study that includes the coverage,
01 deductible, coverage limit, rate, and rating classification system for the type or class 02 of liability insurance the group intends to offer; and 03 (4) the states in which the risk retention group intends to operate. 04 (c) At least 30 days before a domestic risk retention group implements a 05 material change or revision to an approved plan of operation or feasibility study, the 06 material change or revision shall be filed with the director. A material change or 07 revision may not be implemented unless the domestic risk retention group receives the 08 director's written approval. In this subsection, "material change or revision" includes 09 an offering of an additional type or class of liability insurance. 10 (d) In this section, 11 (1) "liability" means legal liability for damages, including costs of 12 defense, legal costs and fees, and other claims expenses, because of injury to another 13 person, damage to property, or other damage or loss to a person resulting from or 14 arising out of a business, whether profit or nonprofit, trade, product, service, including 15 a professional service, or an activity of a state or local government, or an agency or 16 political subdivision of a state or local government; "liability" does not include 17 personal risk liability or employer's liability with respect to its employees other than 18 legal liability under 45 U.S.C. 51 (Federal Employers' Liability Act); 19 (2) "personal risk liability" means liability for damages because of 20 injury to a person, damage to property, or other loss or damage resulting from a 21 personal, familial, or household responsibility or activity and that is not a responsibility 22 or activity described under (1) of this subsection. 23 Sec. 21.09.300. DISCLOSURE OF MATERIAL TRANSACTIONS. (a) A 24 domestic insurer shall file a report with the director disclosing a material acquisition 25 and disposition of assets or a material nonrenewal, cancellation, or revision of ceded 26 reinsurance agreements unless the acquisition and disposition of assets or material 27 nonrenewal, cancellation, or revision of ceded reinsurance agreements have been 28 submitted to the director for review, approval, or information purposes as required by 29 this title. 30 (b) The report required under (a) of this section is due 15 days after the end 31 of the calendar month in which a reportable transaction occurs.
01 (c) Except as provided in this section, a report obtained by or disclosed to the 02 director under this section is confidential, is not subject to subpoena, and may not be 03 made public by the director, or another person, without the prior written consent of the 04 insurer submitting the report. A report under this section may be disclosed to an 05 insurance regulatory agency of another state or to the National Association of 06 Insurance Commissioners, with notice of the disclosure sent to the insurer. If the 07 director, after giving an insurer notice and an opportunity to be heard, determines that 08 the interest of policyholders, shareholders, or the public will be served by publication 09 of the report, the director may publish all or any part of the report in a manner the 10 director determines appropriate. 11 (d) A domestic insurer's report of an acquisition or disposition of an asset 12 (1) shall be made under (a) of this section if the acquisition or 13 disposition is material; for purposes of this subsection, an acquisition or disposition, 14 or the aggregate of a series of related acquisitions or related dispositions during any 15 30-day period is material if it is nonrecurring, not in the ordinary course of business, 16 and involves more than five percent of the reporting insurer's total admitted assets as 17 reported in its most recent financial statement required by law that is filed with the 18 division; 19 (2) shall be made on asset acquisition, including a purchase, lease, 20 exchange, merger, consolidation, succession, or other acquisition other than the 21 (A) construction or development of real property by or for the 22 reporting insurer; or 23 (B) acquisition of material for construction or development of 24 real property; 25 (3) shall be made on asset disposition including a sale, lease, exchange, 26 merger, consolidation, mortgage, hypothecation, assignment for the benefit of creditors, 27 or abandonment; 28 (4) must include information on the 29 (A) date of transaction; 30 (B) manner of acquisition or disposition; 31 (C) description of the assets involved;
01 (D) nature and amount of the consideration given or received; 02 (E) purpose of, or reason for, the transaction; 03 (F) manner by which the amount of consideration was 04 determined; 05 (G) gain or loss recognized or realized as a result of the 06 transaction; and 07 (H) names of persons from whom the assets were acquired or 08 to whom the assets were disposed. 09 (e) A domestic insurer's report of nonrenewal, cancellation, or revision of a 10 ceded reinsurance agreement 11 (1) shall be made under (a) of this section if the nonrenewal, 12 cancellation, or revision is material; for purposes of this subsection, a material 13 nonrenewal, cancellation, or revision is one that affects (A) for property and casualty 14 business, including accident and health business when written as property and casualty 15 business, more than 50 percent of an insurer's ceded written premium; or (B) for life, 16 annuity, and accident and health business, more than 50 percent of the total reserve 17 credit taken for business ceded, on an annualized basis as indicated in the insurer's 18 most recently filed statutory statement; however, a filing is not required if the insurer's 19 ceded written premium or the total reserve credit taken for business ceded represents, 20 on an annual basis, less than 10 percent of direct written premiums and assumed 21 written premiums or 10 percent of the statutory reserve requirement before a cession; 22 (2) shall be filed without regard to which party has initiated the 23 nonrenewal, cancellation, or revision of ceded reinsurance whenever any of the 24 following conditions exist: 25 (A) the entire cession has been cancelled, nonrenewed, or 26 revised and ceded indemnity and loss adjustment expense reserves after a 27 nonrenewal, cancellation, or revision represent less than 50 percent of the 28 comparable reserves that would have been ceded had the nonrenewal, 29 cancellation, or revision not occurred; 30 (B) an admitted or accredited reinsurer has been replaced on an 31 existing cession by an unauthorized reinsurer; however, a report shall be filed
01 only if the result of the revision affects more than 10 percent of the cession; 02 or 03 (C) collateral requirements previously established for 04 unauthorized reinsurers have been reduced; however, a report shall be filed 05 only if the result of the revision affects more than 10 percent of the cession; 06 and 07 (3) must include 08 (A) the effective date of the nonrenewal, cancellation, or 09 revision; 10 (B) a description of the transaction with an identification of the 11 initiator of the transaction; 12 (C) the purpose of, or reason for, the transaction; and 13 (D) if applicable, the identity of the replacement reinsurers. 14 (f) An insurer is required to report under (a) of this section on a 15 nonconsolidated basis unless the insurer is part of a consolidated group of insurers that 16 utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the 17 solvency and integrity of the insurer's reserves and the insurer ceded substantially all 18 of its direct and assumed business to the pool. An insurer is presumed to have ceded 19 substantially all of its direct and assumed business to a pool if the insurer has less than 20 $1,000,000 total direct written premiums and assumed written premiums during a 21 calendar year that is not subject to a pooling arrangement and the net income of the 22 business not subject to the pooling arrangement represents less than five percent of the 23 insurer's capital and surplus. 24 Sec. 21.09.310. AUTHORIZATION OF UNITED STATES BRANCHES OF 25 ALIEN INSURERS AND GENERAL REQUIREMENTS. (a) This section applies 26 to all United States branches of alien insurers using this state as a state of entry to 27 transact the business of insurance in the United States. Except as provided elsewhere 28 in this title, a United States branch is subject to all state laws applicable to an insurer 29 domiciled in this state. 30 (b) An alien insurer may apply for a certificate of authority to use this state 31 as a state of entry to transact the business of insurance in the United States by
01 (1) qualifying as an insurer licensed to do business in this state; 02 (2) establishing a trust under a trust agreement approved in writing by 03 the director with a United States bank acceptable to the director in an amount not less 04 than the greater of 05 (A) the minimum basic capital or basic guarantee surplus and 06 additional maintained surplus required under AS 21.09.070; or 07 (B) the authorized control level risk based capital under 08 AS 21.14; 09 (3) submitting a copy of its charter and bylaws, if any, currently in 10 force, and other documents necessary to show the kind of business it is authorized to 11 transact in its domiciliary jurisdiction; documents submitted under this paragraph must 12 be attested to as accurate and complete by the insurance supervisory official in the 13 domiciliary jurisdiction, and must include an English translation, if in a language other 14 than English; 15 (4) submitting a full statement, subscribed and affirmed as true by two 16 officers or equivalent responsible representatives in a manner that the director 17 prescribes, of its financial condition as of the close of its latest fiscal year, showing 18 its assets, liabilities, income disbursements, business transacted, and other facts 19 required to be shown in its annual statement, as reported to the insurance supervisory 20 official in its domiciliary jurisdiction; all documents submitted under this paragraph 21 must include an English translation if in a language other than English; 22 (5) submitting to an examination under AS 21.06.120(b) at its principal 23 office within the United States, and elsewhere if necessary, unless the director accepts 24 a report of the insurer's recent examination and the report has been certified by the 25 insurance supervisory official of the insurer's domiciliary jurisdiction; and 26 (6) payment of fees established under AS 21.06.250. 27 (c) Before issuing or renewing a certificate of authority for a United States 28 branch, the director may require satisfactory proof that the insurer does not intend to 29 transact insurance business in violation of the provisions of this title or that is not 30 authorized by its charter. Proof required under this subsection may include the alien 31 insurer's charter, an agreement evidenced by a duly certified resolution of its board of
01 directors, or other proof that the director may require. 02 (d) The director may renew a certificate of authority for a United States branch 03 if satisfied, by proof the director may require, that the insurer is not delinquent with 04 respect to a requirement or qualification imposed by this title and that its continuance 05 to transact the business of insurance in this state will not be hazardous or prejudicial 06 to the best interest of the people of this state. 07 (e) A United States branch may not receive or renew a certificate of authority 08 in this state 09 (1) to transact a kind of insurance or a combination of kinds of 10 insurance that are not permitted to be transacted by domestic insurers in this state; 11 (2) if it transacts business other than the business of insurance 12 anywhere else within the United States unless the business, in the opinion of the 13 director, is necessarily or properly incidental to the kind of insurance that it is 14 authorized to transact in this state; 15 (3) if it fails to keep full and correct entries of its transactions; records 16 of entries shall at all times be maintained in its principal office within this state; or 17 (4) if it fails to comply with a requirement or limitation of this title that 18 it is not exempted from by another provision of this title and that is applicable to 19 similar domestic insurers and if, in the judgment of the director, the requirement or 20 limitation is necessary to protect the interest of the policyholders. 21 (f) A United States branch that transacts a kind or combination of kinds of 22 insurance outside this state that is not permitted to be done in this state by similar 23 domestic insurers may not have a certificate of authority issued or renewed in this state 24 unless, in the judgment of the director, the transaction of that kind of insurance is not 25 prejudicial to the best interest of the people of this state. 26 (g) A United States branch shall maintain assets in a trust account in an 27 amount not less than the United States branch's reserves and other liabilities, plus the 28 greater of 29 (1) the minimum basic capital or basic guaranteed surplus and 30 additional maintained surplus required under AS 21.09.070; or 31 (2) the authorized control level risk based capital under AS 21.14.
01 (h) A written trust agreement must contain provisions that 02 (1) vest legal title to trusteed assets in the trustees, and their lawfully 03 appointed successors; 04 (2) require that all assets deposited in the trust be continuously kept 05 within the United States; 06 (3) provide for substitution of a new trustee in case of a vacancy by 07 death, resignation, or other reason, subject to the prior written approval of the director; 08 (4) require that the trustee continuously maintain a record sufficient to 09 identify the assets of the trust fund; 10 (5) require that trusteed assets consist only of cash, investments eligible 11 for investment of the funds of domestic insurers, and accrued interest on the assets, if 12 collectible by the trustee, subject to the limits on investment of funds by domestic 13 insurers under this title; 14 (6) require that the trust be for the exclusive benefit, security, and 15 protection of the policyholders, or policyholders and creditors, of the United States 16 branch in the United States and that the trust be maintained as long as there is an 17 outstanding liability of the alien insurer arising out of its transaction of insurance in 18 the United States; and 19 (7) provide that withdrawal of an asset may not be made or permitted 20 by a trustee without the prior written approval of the director except 21 (A) to make deposits required by law in a state for the security 22 or benefit of all policyholders, or policyholders and creditors, of the United 23 States branch in the United States; 24 (B) to withdraw funds deposited in another state under (A) of 25 this paragraph if 26 (i) the written trust agreement requires prior written 27 approval of the insurance supervising official of that other state; 28 (ii) written notice of the nature and extent of the 29 withdrawal is provided to the director within 30 days of the withdrawal; 30 and 31 (iii) the total trusteed assets remaining are in excess of
01 the total assets required to be maintained in trust under (g) of this 02 section; 03 (C) upon the specific written direction of the United States 04 manager, who is duly authorized and is acting under either general or specific 05 written authority previously given or delegated by the board of directors, to 06 substitute other assets as permitted by this title if the substituted assets are of 07 at least equal value and quality to those withdrawn; 08 (D) to transfer assets to an official liquidator or rehabilitator 09 under an order of a court of competent jurisdiction; or 10 (E) if provided under the terms of the written trust agreement, 11 to pay over to the United States manager of the United States branch, upon 12 request, income, dividends, or interest accumulations of the assets of the trust 13 fund that are in excess of the total assets required to be maintained in trust 14 under (g) of this section. 15 (i) A written trust agreement and all amendments to it shall be authenticated 16 in a form and manner that the director may prescribe and may not take effect until 17 approved by the director. The director may not approve a trust agreement unless the 18 director makes a written finding that 19 (1) the written trust agreement or its amendments are sufficient in form 20 and in conformity with law; 21 (2) a person designated as a trustee is eligible to act in that capacity; 22 and 23 (3) the written trust agreement is adequate to protect the interests of the 24 beneficiaries of the trust. 25 (j) The director may approve written modifications of, or variations in, a 26 written trust agreement upon a finding that the proposed changes are not prejudicial 27 to the interests of the people of this state or the United States policyholders and 28 creditors of the United States branch. 29 (k) The director may conduct examinations of the trusteed assets of an 30 authorized United States branch at the insurer's expense and may require the trustee 31 or trustees to file a statement, in a form as prescribed by the director, certifying the
01 assets and amounts of the trust fund. 02 (l) The director, upon finding that the requisites for the approval of the trust 03 agreement no longer exist, may issue an order that withdraws approval of a written 04 trust agreement and amendments to it. An order issued under this subsection takes 05 effect 10 days after being issued. 06 (m) In addition to all other actions permitted under this title, refusal or neglect 07 of a trustee to comply with the requirements of this title is a cause for suspension or 08 revocation of the United States branch's certificate of authority or the liquidation of the 09 alien insurer's United States branch. 10 (n) Annual statements under AS 21.09.200 and quarterly statements under 11 AS 21.09.205 (1) may only relate to insurance transactions and affairs within the 12 United States, assets held by or for the United States branch for the protection of 13 policyholders and creditors within the United States, and liabilities incurred against 14 those assets; and (2) may not contain a statement in regard to assets and business 15 transacted in a place not described in this subsection. The annual and quarterly 16 statements shall be signed and verified by the United States manager, attorney-in-fact, 17 or a duly empowered assistant United States manager of the United States branch. 18 (o) In a form prescribed by the director, an authorized United States branch 19 shall file with its annual and quarterly statements a statement of trusteed surplus 20 covering the same time period. The trusteed surplus shall consist of the aggregate 21 value of the United States branch's general state deposits and assets deposited with a 22 trustee under this section, plus accrued interest income if the interest were collected 23 by the states for the trustees, less the aggregate net amount of all its reserves and other 24 liabilities in the United States as determined under this subsection. The items of 25 securities and other property held under trust deeds shall be certified by the United 26 States trustee. To determine the net amount of the United States branch's liabilities in 27 the United States to be reported in the statement of trusteed surplus, the United States 28 branch shall adjust its total liabilities reported on its accompanying annual or quarterly 29 statement as follows: 30 (1) by adding back liabilities used to offset admitted assets reported in 31 the accompanying annual or quarterly statement; and
01 (2) by deducting 02 (A) unearned premiums on agent's balances or uncollected 03 premiums not more than 90 days past due; 04 (B) reinsurance on losses with authorized insurers, less unpaid 05 reinsurance premiums; 06 (C) reinsurance recoverables on paid losses from unauthorized 07 insurers that are included as an asset in the annual statement, but only to the 08 extent a liability for unauthorized recoverables as described in this paragraph 09 are included in the liabilities report in the trusteed surplus statement; 10 (D) special state deposits held for the exclusive benefit of 11 policyholders, or policyholders and creditors, of a particular state not exceeding 12 net liabilities reported for that state; 13 (E) secured accrued retrospective premiums; 14 (F) if a life insurer, 15 (i) the amount of its policy loans to policyholders within 16 the United States, not exceeding the amount of legal reserve required 17 on an affected policy; and 18 (ii) the net amount of uncollected and deferred 19 premiums; and 20 (G) other nontrusteed assets, upon a written finding by the 21 director that the other nontrusteed assets secure liabilities in a substantially 22 similar manner to those permitted under this subsection. 23 (p) In addition to the annual and quarterly statements and the statements of 24 trusteed surplus, the director may require additional information relating to total 25 business or assets, or any portion of them, of the alien insurer or its United States 26 branch. 27 (q) In addition to the general statement of the financial condition of the United 28 States branch, a report of examination must include a trusteed surplus statement as of 29 the date of the examination. 30 (r) In this section, 31 (1) "trusteed assets" are the assets maintained in a trust account under
01 (g) of this section; 02 (2) "United States branch" means the business unit through which 03 business is transacted within the United States by an alien insurer and the assets and 04 liabilities of the insurer within the United States applicable to that business. 05 * Sec. 15. AS 21.12.020(a) is amended to read: 06 (a) Credit for reinsurance transactions shall be allowed a domestic ceding 07 insurer as either an asset or a deduction from liability on account of reinsurance ceded 08 only if the reinsurance is ceded to an 09 (1) assuming insurer that is licensed to transact insurance or reinsurance 10 in this state; 11 (2) assuming insurer that is accredited as a reinsurer in this state; an 12 accredited reinsurer is one that 13 (A) files evidence of submission [SUBMITS] to this state's 14 jurisdiction, submits to this state's authority to examine its books and records 15 under AS 21.06.120, is licensed to transact insurance or reinsurance in at least 16 one state that is accredited by the National Association of Insurance 17 Commissioners, or, in the case of a United States branch of an alien 18 admitted insurer, is entered through and licensed to transact insurance or 19 reinsurance in at least one state that is accredited by the National 20 Association of Insurance Commissioners; [AND FILES ANNUALLY WITH 21 THE DIRECTOR A COPY OF THE REINSURER'S ANNUAL STATEMENT 22 FILED WITH THE INSURANCE DEPARTMENT OF THE REINSURER'S 23 STATE OF DOMICILE AND A COPY OF THE REINSURER'S MOST 24 RECENT AUDITED FINANCIAL STATEMENT; OR] 25 (B) [IN THE CASE OF A UNITED STATES BRANCH OF 26 AN ALIEN ASSUMING INSURER, IS ENTERED THROUGH, AND 27 LICENSED TO TRANSACT INSURANCE OR REINSURANCE IN, AT 28 LEAST ONE STATE ACCREDITED BY THE NATIONAL ASSOCIATION 29 OF INSURANCE COMMISSIONERS, FILES ANNUALLY WITH THE 30 DIRECTOR A COPY OF ITS ANNUAL FINANCIAL STATEMENT THAT 31 IS FILED WITH THE INSURANCE REGULATORY AGENCY OF ITS
01 STATE OF DOMICILE, AND] maintains at least $20,000,000 in policyholder 02 surplus and whose accreditation has not been denied by the director within 03 90 days of application to the director, or maintains less than $20,000,000 04 in policyholder surplus and whose application for accreditation has been 05 approved by the director; and 06 (C) files annually with the director a copy of the reinsurer's 07 annual financial statement filed with the insurance department of the 08 reinsurer's state of domicile or state of entry and a copy of the reinsurer's 09 most recent audited financial statement [THE SURPLUS REQUIREMENTS 10 IN THIS SUBPARAGRAPH DO NOT APPLY TO REINSURANCE CEDED 11 AND ASSUMED UNDER A POOLING ARRANGEMENT AMONG 12 INSURERS IN THE SAME HOLDING COMPANY SYSTEM]; 13 (3) assuming insurer that is domiciled in a state, or in the case of a 14 United States branch of an alien assuming insurer, is entered through a state accredited 15 by the National Association of Insurance Commissioners that employs standards 16 regarding credit for reinsurance ceded substantially similar to those applicable under 17 (1) and (2) of this subsection, the assuming insurer maintains a policyholder surplus 18 of at least $20,000,000, and the assuming insurer submits to the authority of this state 19 to examine its books and records; the surplus requirements in this paragraph do not 20 apply to reinsurance ceded and assumed under a pooling arrangement among insurers 21 in the same holding company system; 22 (4) assuming alien insurer that 23 (A) maintains a trust fund in a qualified United States financial 24 institution for the payment of the valid claims of its United States policyholders 25 and ceding insurers, and their assigns and successors in interest, that conforms 26 to the following requirements: 27 (i) the trust shall be established in a form approved by 28 the director; the trust instrument must provide that contested claims are 29 valid and enforceable upon the final order of any court of competent 30 jurisdiction in the United States; the trust shall vest legal title to its 31 assets in the trustees of the trust for its United States policyholders and
01 ceding insurers, their assigns, and successors in interest; the trust and 02 the assuming insurer are subject to examination as determined by the 03 director; the trust must remain in effect for so long as the assuming 04 insurer has outstanding liabilities due under the reinsurance agreements 05 subject to the trust; 06 (ii) on or before March 1 of each year the trustees shall 07 report in writing to the director on the balance of the trust and list the 08 trust's investments at the end of the preceding year, and shall certify the 09 date of termination of the trust, if so planned, or certify that the trust 10 does not expire before the following December 31; 11 (iii) in the case of a single assuming insurer, the trust 12 shall consist of trust money representing the assuming insurer's 13 liabilities attributable to business written in the United States and, in 14 addition, include a trust surplus of not less than $20,000,000; the single 15 assuming insurer shall make available to the director an annual 16 certification of the insurer's solvency by the insurer's domiciliary 17 regulator and by an independent certified public accountant or an 18 accountant holding a substantially equivalent designation as 19 determined by the director; 20 (iv) in the case of a group, including incorporated and 21 [OF] individual unincorporated insurers, the trust shall consist of trust 22 money representing the group's liabilities attributable to business written 23 in the United States and, in addition, include a trust surplus not less 24 than $100,000,000; the incorporated members of the group may not 25 be engaged in any business other than underwriting as a member 26 of the group and are subject to the same level of solvency 27 regulation and control by the group's domiciliary regulator as are 28 the unincorporated members; the group shall make available to the 29 director an annual certification of the solvency of each insurer [OF 30 THE INDIVIDUAL UNINCORPORATED INSURERS] by the group's 31 domiciliary regulator and by an independent certified public accountant,
01 or an accountant holding a substantially equivalent designation as 02 determined by the director; 03 (v) in the case of a group of incorporated insurers under 04 common administration that complies with the reporting requirements 05 contained in (ii) of this subparagraph, that has continuously transacted 06 an insurance business outside the United States for at least three years 07 immediately before making application for accreditation, that submits 08 to this state's authority to examine its books and records and bears the 09 expense of the examination, and that has aggregate policyholders' 10 surplus of $10,000,000,000, the trust shall be in an amount equal to the 11 group's several liabilities attributable to business ceded by United States 12 ceding insurers to a member of the group under reinsurance contracts 13 issued in the name of the group, and the group shall maintain a joint 14 trustee surplus, of which $100,000,000 shall be held jointly for the 15 benefit of United States ceding insurers of a member of the group as 16 additional security for the group's liabilities, and each member of the 17 group shall make available to the director an annual certification of the 18 member's solvency by the member's domiciliary regulator and the 19 member's independent certified public accountant, or an accountant 20 holding a substantially equivalent designation as determined by the 21 director; and 22 (B) reports annually to the director information substantially the 23 same as that required to be reported on the National Association of Insurance 24 Commissioners' annual statement form by licensed insurers to enable the 25 director to determine the sufficiency of the trust fund; 26 (5) assuming insurer that does not meet the requirements of (1) - (4) 27 of this subsection, but only with respect to the insurance of risks located in 28 jurisdictions where the reinsurance is required by applicable law or regulation of that 29 jurisdiction. 30 * Sec. 16. AS 21.12.020(g) is amended to read: 31 (g) An [A LIFE] insurer may receive credit for reinsurance transactions if the
01 reinsurance agreement meets all applicable requirements established by the director. 02 * Sec. 17. AS 21.14.040 is amended to read: 03 Sec. 21.14.040. AUTHORIZED CONTROL LEVEL EVENT. If an authorized 04 control level event occurs, the director shall take the action necessary 05 (1) under AS 21.14.030(a) [AS 21.14.030(b)] against the insurer; or 06 (2) to place the insurer under regulatory control under AS 21.78 if, 07 after a hearing under AS 21.06.180 - 21.06.240, the director determines it to be in the 08 best interest of the policyholders and creditors of the insurer, and of the public. 09 * Sec. 18. AS 21.18.060(b) is amended to read: 10 (b) The director may require that the reserves be equal to the unearned 11 portions of the gross premiums in force after deducting applicable reinsurance in 12 solvent insurers as computed on each respective risk from the policy's date of issue. 13 [EXCEPT AS REQUIRED BY THE DIRECTOR UNDER THIS SUBSECTION, THE 14 PORTIONS OF THE GROSS PREMIUM IN FORCE, LESS APPLICABLE 15 REINSURANCE IN SOLVENT INSURERS, TO BE HELD AS AN UNEARNED 16 PREMIUM RESERVE SHALL BE COMPUTED ACCORDING TO THE 17 FOLLOWING TABLE: 18 TERM FOR WHICH POLICY RESERVE FOR UNEARNED 19 WAS WRITTEN PREMIUM 20 1 YEAR OR LESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1/2 21 2 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 3/4 22 2ND YEAR 1/4 23 3 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 5/6 24 2ND YEAR 1/2 25 3RD YEAR 1/6 26 4 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ST YEAR 7/8 27 2ND YEAR 5/8 28 3RD YEAR 3/8 29 4TH YEAR 1/8 30 5 YEARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1ST YEAR 9/10 31 2ND YEAR 7/10
01 3RD YEAR 1/2 02 4TH YEAR 3/10 03 5TH YEAR 1/10 04 OVER 5 YEARS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PRO RATA.] 05 * Sec. 19. AS 21.18.060(c) is amended to read: 06 (c) An [IN LIEU OF COMPUTATION ACCORDING TO THE TABLE IN 07 (b) OF THIS SECTION, THE] insurer shall [AT ITS OPTION MAY] compute all of 08 the reserves on a monthly or more frequent pro rata basis. 09 * Sec. 20. AS 21.18.090 is amended to read: 10 Sec. 21.18.090. LOSS RESERVES, LIABILITY INSURANCE, AND 11 WORKERS' COMPENSATION. Where required in the form of annual statement 12 required of the insurer, the reserve for outstanding losses under insurance against loss 13 or damage from accident to or injuries suffered by an employee or other person and 14 for which the insured is liable shall be computed as follows: 15 (1) for all liability claims under policies written more than three 16 years before the end of the calendar year covered by the annual statement, the 17 reserve shall be the undiscounted value of the determined and the estimated 18 future payments [SUITS BEING DEFENDED UNDER POLICIES WRITTEN MORE 19 THAN 20 (A) 10 YEARS BEFORE THE DATE THE STATEMENT IS 21 MADE, $1,500 FOR EACH SUIT; 22 (B) FIVE OR MORE AND LESS THAN 10 YEARS BEFORE 23 THE STATEMENT IS MADE, $1,000 FOR EACH SUIT; 24 (C) THREE OR MORE AND LESS THAN FIVE YEARS 25 BEFORE THE STATEMENT IS MADE, $850 FOR EACH SUIT]; 26 (2) for all liability policies written during the three years immediately 27 preceding the date the statement is made, the reserve shall be the greater of 60 28 percent of the earned liability premiums of each of the three years less all losses and 29 expense payments made under liability policies written in the corresponding years or 30 the undiscounted value of the known and unknown claims; [BUT THE RESERVE, 31 FOR THE FIRST OF THE THREE YEARS, SHALL BE NOT LESS THAN $750
01 FOR EACH OUTSTANDING LIABILITY SUIT ON THE YEAR'S POLICIES]; 02 (3) for all workers' compensation claims under policies written more 03 than three years before the end of the calendar year covered by the annual 04 statement [IS MADE], the reserve may not [SHALL] be less than the present value 05 at four percent interest of the determined and the estimated future payments; 06 (4) for all workers' compensation claims under policies written in the 07 three years immediately preceding the end of the calendar year covered by [DATE] 08 the annual statement [IS MADE], the reserve may not [SHALL] be less than 65 09 percent of the earned workers' compensation premiums of each of the three years, less 10 all loss and loss expense payments made in connection with the claims under policies 11 written in the corresponding years; [BUT IN THE FIRST YEAR OF THE 12 THREE-YEAR PERIOD,] the reserve may not [SHALL] be [NOT] less than the 13 present value at four [4] percent interest of the determined and the estimated unpaid 14 compensation claims under policies written during the three-year period [YEAR]. 15 * Sec. 21. AS 21.18.110(a) is amended to read: 16 (a) The director shall annually value, or cause to be valued, the reserve 17 liabilities (hereinafter called reserves) for all outstanding life insurance policies and 18 annuity and pure endowment contracts of every life insurer doing business in this state, 19 and may certify the amount of the reserves, specifying the mortality table or tables, 20 rate or rates of interest, and methods (net level premium method or other) used in the 21 calculation of the reserves. In calculating the reserves, the director may use group 22 methods and approximate averages for fractions of a year or otherwise. For an alien 23 insurer, the valuation shall be limited to its insurance transactions in the United States. 24 For the purpose of making the valuation the director may employ a competent actuary 25 who shall be paid by the insurer for which the service is rendered [; BUT A 26 DOMESTIC INSURER MAY MAKE THE VALUATION AND IT MAY BE 27 RECEIVED BY THE DIRECTOR UPON SATISFACTORY PROOF OF ITS 28 CORRECTNESS]. For a foreign or alien insurer, the director may accept, in [IN] 29 lieu of the valuation of the reserves required of a foreign or alien insurer, [THE 30 DIRECTOR MAY ACCEPT] a valuation made, or caused to be made, by the 31 insurance supervisory official of a state or other jurisdiction if the valuation complies
01 with the minimum standard provided in this section and if the official of the state or 02 jurisdiction accepts as sufficient and valid for all legal purposes the certificate of 03 valuation of the director when the certificate states the valuation was made in a 04 specified manner in which the aggregate reserves would be at least as large as if they 05 had been computed in the manner prescribed by the law of that state or jurisdiction. 06 An insurer that at any time adopted a standard of valuation producing greater aggregate 07 reserves than those calculated according to the minimum standard provided in this 08 section may, with the approval of the director, adopt a lower standard of valuation, but 09 not lower than the minimum provided in this section. 10 * Sec. 22. AS 21.18.110(n) is amended to read: 11 (n) The actuarial opinion must 12 (1) be submitted with the annual statement reflecting the valuation of 13 the reserve liabilities; 14 (2) apply to all business in force, including individual and group health 15 insurance plans; 16 (3) be based on standards adopted by the Actuarial Standards Board; 17 and 18 (4) unless exempted by regulation, include an assessment as to 19 whether the reserves and related actuarial items held in support of the policies and 20 contracts, when considered in light of the assets held by an insurer with respect to the 21 reserves and related actuarial items, including investment earnings on the assets and 22 considerations anticipated to be received and retained under policies and contracts, 23 make adequate provision for an insurer's obligations under a policy or contract 24 including the benefits under and expenses associated with a policy or contract. 25 * Sec. 23. AS 21.18.110(q) is amended to read: 26 (q) A qualified actuary who submits an opinion under (m) of this section 27 (1) is not liable for damages to a person, other than the insurance 28 company and the director, for an act, error, omission, decision, or conduct with respect 29 to the actuary's opinion except in a case of fraud or wilful misconduct; 30 (2) is subject to disciplinary action by the director; and 31 (3) shall prepare [INCLUDE] a memorandum, in form and substance
01 acceptable to the director, to support the actuarial opinion. 02 * Sec. 24. AS 21.18.110(r) is amended to read: 03 (r) If the insurer fails to provide a supporting memorandum as requested by 04 the director [REQUIRED BY (q)(3) OF THIS SECTION] within a period specified 05 by regulation or the director determines that the supporting memorandum fails to meet 06 the standards adopted by regulation or is otherwise unacceptable to the director, the 07 director may engage a qualified actuary, at the expense of the insurer, to review the 08 opinion and the basis for the opinion and to prepare a supporting memorandum as 09 required under (q) of this section. 10 * Sec. 25. AS 21.21.230 is amended to read: 11 Sec. 21.21.230. SAVINGS AND LOAN. To the extent that the account is 12 insured by the Federal Deposit [SAVINGS AND LOAN] Insurance Corporation, an 13 insurer may invest in share or savings accounts of savings and loan and building and 14 loan associations. 15 * Sec. 26. AS 21.21.250(a) is amended to read: 16 (a) An insurer may make loans or investments not otherwise expressly 17 permitted under this chapter, in aggregate amount not over five percent of the insurer's 18 assets and not over one percent of the insurer's assets for [OF] any one loan or 19 investment, if the loan or investment fulfills the requirements of AS 21.21.030, and 20 otherwise qualifies as a sound investment. However, a loan or investment may not be 21 represented by 22 (1) an item described in AS 21.18.030, or a loan or investment 23 otherwise expressly prohibited; 24 (2) agents' balances, or amounts advanced to or owing by agents or 25 former agents of the insurer, whether or not secured; except policy loans, mortgage 26 loans, and collateral loans otherwise authorized under this chapter; 27 (3) a category of loans or investments eligible under other provisions 28 of this chapter; or 29 (4) an asset theretofore acquired or held by the insurer under any other 30 category of loans or investments eligible under this chapter. 31 * Sec. 27. AS 21.21.370(a) is amended to read:
01 (a) A domestic insurer may [NOT] acquire, directly or indirectly, a medium 02 grade or lower grade obligation of an institution if, after giving effect to the 03 acquisition, 04 (1) the aggregate amount of all medium grade and lower grade 05 obligations held by the domestic insurer does not exceed [EXCEEDS] 20 percent of 06 its admitted assets and if not more than 07 (A) 10 percent of its admitted assets consist of obligations rated 08 four, five, or six by the securities valuation office; 09 (B) three percent of its admitted assets consist of obligations 10 rated five or six by the securities valuation office; and 11 (C) one percent of its admitted assets consist of obligations 12 rated six by the securities valuation office; and [OR] 13 (2) the aggregate amount of all medium grade and [OR] lower grade 14 obligations held by the domestic insurer does not exceed [EXCEEDS] 30 percent of 15 its policyholders' surplus account as shown by the insurer's most recent report filed 16 under AS 21.06.150, AS 21.09.200, or 21.09.205. 17 * Sec. 28. AS 21.22.010(g) is amended to read: 18 (g) The provisions of this section do not apply to 19 (1) an offer of, request for, invitation for, or agreement regarding [, 20 OR] acquisition of a voting security that, immediately before the consummation of the 21 offer, request, invitation, agreement, or acquisition, was not issued and outstanding; or 22 (2) an offer, request, invitation, agreement, or acquisition that the 23 director by order may exempt as not having been made or entered into for the purpose 24 and not having the effect of changing or influencing the control of the domestic 25 insurer. 26 * Sec. 29. AS 21.22.030 is amended by adding a new subsection to read: 27 (d) The director may retain at the acquiring person's expense an attorney, 28 actuary, accountant, or other expert not otherwise a part of the director's staff, if 29 reasonably necessary to assist the director in reviewing the proposed acquisition of 30 control. 31 * Sec. 30. AS 21.22.060(b) is amended to read:
01 (b) Every insurer subject to registration shall file a registration statement on 02 a form provided by the director, that must contain current information about 03 (1) the capital structure, general financial condition, ownership, and 04 management of the insurer and any person controlling the insurer; 05 (2) the identity of every member of the insurance holding company 06 system; 07 (3) the following agreements in force, relationships subsisting, and 08 transactions currently outstanding between the insurer and its affiliates: 09 (A) loans, other investments, or purchases, sales, or exchanges 10 of securities of the affiliates by the insurer or of the insurer by its affiliates; 11 (B) purchases, sales, or exchanges of assets; 12 (C) transactions not in the ordinary course of business; 13 (D) guarantees or undertakings for the benefit of an affiliate that 14 result in an actual contingent exposure of the insurer's assets to liability, other 15 than insurance contracts entered into in the ordinary course of the insurer's 16 business; 17 (E) all management and service contracts and all cost-sharing 18 arrangements [, OTHER THAN COST ALLOCATION ARRANGEMENTS 19 BASED UPON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES]; 20 and 21 (F) reinsurance agreements [COVERING ALL OR 22 SUBSTANTIALLY ALL OF ONE OR MORE LINES OF INSURANCE OF 23 THE CEDING COMPANY]; and 24 (4) other matters concerning transactions between registered insurers 25 and any affiliates that may be included from time to time in a registration form 26 adopted or approved by the director. 27 * Sec. 31. AS 21.22.060(c) is amended to read: 28 (c) The director may permit an authorized insurer that is a member of a 29 holding company system subject to registration under the laws or regulations of its 30 state of domicile that are in the opinion of the director substantially similar to those 31 contained in this chapter to satisfy the requirements of (a) of this section by filing a
01 statement in accordance with the laws of its state of domicile [EXCEPT THAT THE 02 DIRECTOR MAY AT ANY TIME REQUIRE A COPY OF THAT STATEMENT BE 03 FILED WITH THE DIRECTOR]. 04 * Sec. 32. AS 21.22.060(d) is amended to read: 05 (d) Information [NO INFORMATION] need not be disclosed on the 06 registration statement filed under (b) of this section if that information is not material 07 for the purposes of this section. Unless the director by regulation or order provides 08 otherwise, sales, purchases, exchanges, loans or extensions of credit, [OR] investments, 09 or the aggregate of a series of related transactions, involving one-half of one 10 percent or less of an insurer's admitted assets or five percent or less of the 11 policyholder's surplus as of the 31st day of December of the calendar year in which 12 the transaction took place are not considered material for purposes of this section. 13 * Sec. 33. AS 21.22.060(k) is amended to read: 14 (k) An insurer subject to registration under (a) of this section shall register 15 annually by April 1 of each year for the previous calendar year unless, for good cause 16 shown, the director extends the time for registration. The director may require an 17 insurer [AUTHORIZED TO DO BUSINESS IN THE STATE, THAT IS A MEMBER 18 OF A HOLDING COMPANY SYSTEM AND] that is allowed to register as 19 provided [NOT SUBJECT TO REGISTRATION] under (c) [(a)] of this section, to 20 furnish a copy of 21 (1) the registration statement; 22 (2) [,] the summary specified in (l) of this section; [,] or 23 (3) other information filed by the insurer with the insurance regulatory 24 authority of the insurer's state of domicile. 25 * Sec. 34. AS 21.27.010(a) is amended to read: 26 (a) Except as provided otherwise in this chapter, a [A] person may not act 27 as or represent to be an insurance producer, managing general agent, reinsurance 28 intermediary broker, reinsurance intermediary manager, surplus lines broker, or 29 independent adjuster in this state or relative to a subject resident, located, or to be 30 performed in this state unless licensed under this chapter. A person may not act as or 31 represent to be a managing general agent, reinsurance intermediary broker, or
01 reinsurance intermediary manager representing an insurer domiciled in this state 02 regarding a risk located outside this state unless licensed by this state. 03 * Sec. 35. AS 21.27.020 is amended by adding new subsections to read: 04 (f) The director may adopt regulations establishing additional education or 05 experience requirements for applicants or licensees under this chapter upon due 06 consideration of the availability and accessibility of education and training 07 opportunities in rural areas of the state. Regulations adopted under this subsection are 08 subject to the following provisions: 09 (1) additional educational or experience requirements may not apply to 10 a licensee who has been licensed by the division of insurance before January 1, 1980; 11 (2) a licensee shall complete at least 24 credit hours of approved 12 continuing education courses during each two-year license period; 13 (3) if a licensee has accumulated more credit hours than required under 14 (2) of this subsection by the end of the license period, a maximum of eight hours may 15 be carried over to meet the requirements of (2) of this subsection in the next license 16 period; 17 (4) a program or seminar may not be approved as an acceptable 18 continuing education program unless it is a formal program of learning that contributes 19 to the professional competence of the licensee; individual study programs or 20 correspondence courses may be used to fulfill continuing education requirements if 21 approved by the director; 22 (5) a nonresident licensee is exempt from the requirements of this 23 subsection if the licensee submits evidence satisfactory to the director that the licensee 24 has satisfied any continuing education requirements of the licensee's domiciliary state. 25 (g) The director shall establish a continuing education advisory committee. 26 The committee consists of one representative from the division of insurance, one life 27 and disability insurance representative, one limited lines insurance representative, one 28 property and casualty insurance representative, and one independent insurance adjuster 29 representative. Each committee representative from the insurance industry must 30 possess a valid, current insurance license issued in this state for the field to be 31 represented.
01 (h) The director may make arrangements, including contracting with an outside 02 agency, for administrative services. 03 * Sec. 36. AS 21.27.025(a) is amended to read: 04 (a) A licensee shall notify the director within 30 days in writing by certified 05 mail of a change in residence, employment that is licensed under this chapter, place 06 of business, legal name, fictitious name or alias, mailing address, or phone number; 07 a suspension, [OR] revocation, or disciplinary action of a license by another state or 08 jurisdiction; or a conviction of a misdemeanor or felony. 09 * Sec. 37. AS 21.27.060(d) is amended to read: 10 (d) This section does not apply to an applicant 11 (1) for a limited license under AS 21.27.150(1), (2), or (6); 12 (2) who, at any time within the two-year period immediately preceding 13 the date the current pending application is received by the division, had been licensed 14 in good standing in this state under a license requiring substantially similar 15 qualifications as required by the license applied for; or 16 (3) whose license in its [THE] resident jurisdiction requires the same 17 qualifications as the license applied for in this state if the license in all jurisdictions 18 is in good standing [AND ITS RESIDENT JURISDICTION IS ACCREDITED BY 19 THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS]. 20 * Sec. 38. AS 21.27.100 is amended by adding a new subsection to read: 21 (e) An individual in a firm who acts solely on behalf of a firm that is 22 appointed as an agent on behalf of an admitted insurer under this section, may not be 23 required to also have an appointment if the individual in the firm is licensed with that 24 firm. 25 * Sec. 39. AS 21.27.130 is amended to read: 26 Sec. 21.27.130. FORM AND CONTENT OF LICENSES. A license shall be 27 in the form the director prescribes and must set out 28 (1) the name and [MAILING] address of the licensee, and, if the 29 licensee is required to have a place of business, the physical address of the place of 30 business; 31 (2) if for a firm, the name of the principal or manager of the firm;
01 (3) the kind or class of insurance the licensee is licensed to handle; 02 (4) the effective date and expiration date of the license; 03 (5) the condition under which the license is granted; 04 (6) the date of issuance of the license; 05 (7) each fictitious name and alias under which the licensee may do 06 business; and 07 (8) other information required by the director. 08 * Sec. 40. AS 21.27.360(b) is amended to read: 09 (b) All money, except that made payable to the insurer, representing premium 10 taxes and fees, premiums or return premiums received by the licensee, shall be 11 received in the fiduciary account of the licensee and shall be promptly accounted for 12 and paid to the person entitled to the money. The fiduciary account shall be located 13 in this state unless the licensee is licensed as a nonresident under AS 21.27.270. 14 For purposes of this section, the fiduciary account of the firm shall be considered the 15 fiduciary account of an individual licensee acting on behalf of the firm and shall be 16 the responsibility of the firm. Money deposited into a fiduciary account may not be 17 commingled or otherwise combined with other money, except as allowed under (d) of 18 this section and AS 21.27.365. 19 * Sec. 41. AS 21.27.380(a) is amended to read: 20 (a) Except as provided in this title, the director may renew a license biennially 21 on a date set by the director if the licensee continues to be qualified under this chapter 22 and on or before the close of business of the renewal date, meets all renewal 23 requirements established by regulation and pays the [IF] renewal license fees set 24 under AS 21.06.250 for each license to [ARE RECEIVED BY] the director [ON OR 25 BEFORE THE CLOSE OF BUSINESS OF THE RENEWAL DATE]. A licensee is 26 responsible for knowing the date that a license lapses and for renewing a license before 27 expiration. The director shall mail a renewal notice to the licensee's current address 28 on file with the director 30 days before the renewal date. 29 * Sec. 42. AS 21.27.420 is amended by adding a new subsection to read: 30 (c) With the consent of an applicant or licensee, the director may issue or 31 renew a license with restrictions upon the scope of the person's license or may
01 otherwise restrict or condition the activities of the licensee if the director determines 02 that the person has violated the provisions of this title or to protect the public from 03 injury or potential injury. 04 * Sec. 43. AS 21.27.530 is amended to read: 05 Sec. 21.27.530. INSURANCE PRODUCER QUALIFICATIONS. In addition 06 to the general qualifications under AS 21.27.020, to qualify for issuance or renewal of 07 an insurance producer license, an applicant or licensee 08 (1) must possess the competence necessary to fulfill the responsibilities 09 of an insurance producer; 10 (2) if previously licensed in good standing in this state as an insurance 11 producer, must not have had a license suspended or revoked within the previous four 12 calendar years; 13 (3) for a fraternal society limited insurance producer license, shall file 14 with the application a statement by an officer or director of the appointing fraternal 15 society that affirms that the society has satisfied itself that the applicant is trustworthy 16 and competent to act as its insurance agent; 17 (4) for a license with a scope that includes variable contracts, must 18 either be currently registered with the federal Securities and Exchange Commission as 19 a broker-dealer or personally take and pass, to the satisfaction of the director, tests of 20 the knowledge and competence of the applicant concerning securities; and 21 (5) except for an applicant or licensee who represents to be and acts 22 solely on behalf of admitted insurers as an agent and who does not receive money 23 required to be received in the fiduciary account of the licensee, shall file with the 24 application and maintain in force while licensed a bond in the amount of $10,000, 25 unless a greater amount is required by another provision of this title; a licensee who 26 maintains more than one place of business may satisfy the bond requirement with 27 a single bond. 28 * Sec. 44. AS 21.27.570(a)(3)(B) is amended to read: 29 (B) the controlling insurance producer shall render accounts to 30 the controlled insurer detailing all transactions, including information in the 31 accounts necessary to support compensation, commissions, charges, and other
01 fees received by, or owing to, the controlling producer; 02 * Sec. 45. AS 21.27.620(j) is amended to read: 03 (j) If the director determines after a hearing under AS 21.06.170 - 21.06.240 04 that a managing general agent caused loss or damage arising out of a violation of 05 AS 21.27.590 - 21.27.630 to an insurer, the director may order the managing general 06 agent to make restitution to the insurer, receiver, [THE] rehabilitator, or [THE] 07 liquidator of the insurer for the loss. Restitution ordered under this subsection is in 08 addition to any other liability of the managing general agent and does not affect the 09 rights of a policy holder, claimant, creditor, or third party. The director may, at the 10 request of the insurer, maintain or bring a civil action brought by or on behalf 11 of the insurer and its policyholders and creditors for recovery of compensatory 12 damages for the benefit of the insurer and its policyholders and creditors or seek 13 other appropriate relief. If an order of rehabilitation or liquidation of the insurer 14 has been entered under AS 21.78, the receiver appointed under the order 15 determines that a person has not materially complied with AS 21.27.590 - 16 21.27.630 or an order of the director, and the insurer suffers loss or damage from 17 the noncompliance, the receiver may bring a civil action for the recovery of 18 damages or other appropriate sanctions for the benefit of the insurer. 19 * Sec. 46. AS 21.27.690(b) is amended to read: 20 (b) An [A DOMESTIC] insurer may use a nonresident reinsurance 21 intermediary broker who is not licensed under this chapter if the person is licensed in 22 good standing as a resident reinsurance intermediary broker by an insurance regulator 23 of another state that is accredited by the National Association of Insurance 24 Commissioners. Upon written request, the director may grant written permission for 25 a domestic insurer to use an alien reinsurance intermediary broker not licensed by and 26 without a place of business in a jurisdiction subject to accreditation by the National 27 Association of Insurance Commissioners if the alien reinsurance intermediary broker 28 is licensed in good standing by its domiciliary insurance regulator. The domestic 29 insurer and unlicensed reinsurance intermediary broker are subject to all other 30 requirements of this section. 31 * Sec. 47. AS 21.27.690(e) is amended to read:
01 (e) If the director determines after a hearing under AS 21.06.170 - 21.06.240 02 that a reinsurance intermediary broker caused losses or damage arising out of a 03 violation of AS 21.27.670 - 21.27.700 to an insurer or reinsurer, the director may order 04 the reinsurance intermediary broker to make restitution to the insurer, reinsurer, 05 receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses 06 incurred by the insurer or reinsurer. Restitution ordered under this subsection is in 07 addition to any other liability of the reinsurance intermediary broker and does not 08 affect the rights of a policyholder, claimant, creditor, or third party. The director 09 may, at the request of the insurer, maintain or bring a civil action brought by or 10 on behalf of the reinsurer or insurer and its policyholders and creditors for 11 recovery of compensatory damages for the benefit of the reinsurer or insurer and 12 its policyholders and creditors or seek other appropriate relief. If an order of 13 rehabilitation or liquidation of the insurer has been entered under AS 21.78, the 14 receiver appointed under the order determines that a person has not materially 15 complied with AS 21.27.670 - 21.27.700 or an order of the director, and the 16 insurer suffers loss or damage from the noncompliance, the receiver may bring 17 a civil action for the recovery of damages or other appropriate sanctions for the 18 benefit of the insurer. 19 * Sec. 48. AS 21.27.760(j) is amended to read: 20 (j) If the director determines after a hearing under AS 21.06.170 - 21.06.240 21 that a reinsurance intermediary manager caused losses or damage arising out of a 22 violation of AS 21.27.730 - 21.27.770 to an insurer or reinsurer, the director may order 23 the reinsurance intermediary manager to make restitution to the insurer, reinsurer, 24 receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses 25 incurred by the insurer or reinsurer. Restitution ordered under this subsection is in 26 addition to any other liability of the reinsurance intermediary manager and does not 27 affect the rights of a policyholder, claimant, creditor, or third party. The director 28 may, at the request of the insurer, maintain or bring a civil action brought by or 29 on behalf of the reinsurer or insurer and its policyholders and creditors for 30 recovery of compensatory damages for the benefit of the reinsurer or insurer and 31 its policyholders and creditors or seek other appropriate relief. If an order of
01 rehabilitation or liquidation of the insurer has been entered under AS 21.78, the 02 receiver appointed under the order determines that a person has not materially 03 complied with AS 21.27.730 - 21.27.770 or an order of the director, and the 04 insurer suffers loss or damage from the noncompliance, the receiver may bring 05 a civil action for the recovery of damages or other appropriate sanctions for the 06 benefit of the insurer. 07 * Sec. 49. AS 21.34.040(c)(4) is amended to read: 08 (4) a Lloyd's or other similar group including incorporated and 09 individual unincorporated underwriters, [GROUP OF ALIEN INDIVIDUAL 10 INSURERS] may qualify if it maintains a trust fund in an amount not less than 11 $50,000,000, as security to the full amount, for the protection of all its policy holders 12 and creditors of each member of the group in the United States; the incorporated 13 members may not be engaged in any business other than underwriting as a 14 member of the group and shall be subject to the same level of solvency regulation 15 and control by the group's domiciliary regulator as are the unincorporated 16 members; the trust fund must consist of instruments of substantially the same 17 character and quality as those that are eligible investments for the capital and statutory 18 reserves of admitted insurers authorized to write like kinds of insurance in this state 19 or of irrevocable, clean, and unconditional letters of credit; the trust fund must have 20 an expiration date that at no time is less than five years; 21 * Sec. 50. AS 21.34.080(c) is amended to read: 22 (c) A producing broker shall execute and deliver to the surplus lines broker not 23 later than the end of each month on a form prescribed by the director, and a surplus 24 lines broker shall file with the director with the report required by (a) of this section 25 or with the surplus lines association with the evidence of insurance required by (b) of 26 this section, for surplus lines insurance first placed or renewed in the preceding 27 calendar month, an affidavit that shall be open to public inspection, as to the diligent 28 efforts to place the coverage with admitted insurers, and the results of those efforts. 29 The affidavit must contain a statement by the producing broker that the insured was 30 expressly informed in writing before the [PLACEMENT OF THE SURPLUS LINES] 31 insurance contract or coverage was bound that the surplus lines insurer with whom
01 the insurance was to be placed is not licensed in this state, is not subject to this state's 02 supervision, and, in the event of the insolvency of the surplus lines insurer, losses will 03 not be covered under AS 21.80 (Alaska Insurance Guaranty Association Act). 04 * Sec. 51. AS 21.34.110 is amended to read: 05 Sec. 21.34.110. SURPLUS LINES BROKER'S DUTY TO NOTIFY 06 INSURED. (a) A contract of insurance placed by a surplus lines broker under this 07 chapter is not binding upon the insured and a premium charged is not due and payable 08 until 09 (1) the surplus lines broker has notified the insured in writing, a copy 10 of which shall be maintained by the licensee with the records of the contract, available 11 for examination, that the insurer with which the surplus lines broker places the 12 insurance does not hold a certificate of authority issued by this state and is not subject 13 to its supervision, and in the event of the insolvency of the surplus lines insurer, losses 14 will not be covered under AS 21.80 (Alaska Insurance Guaranty Association Act); or 15 (2) the surplus lines broker has obtained the affidavit of the 16 producing broker that the notice required under AS 21.34.080(c) has been given 17 to the insured; a licensee shall maintain a copy of the affidavit with the record of 18 the contract available for examination. 19 (b) Nothing in this section may be construed as nullifying [SHALL 20 NULLIFY] an agreement by an insurer to provide insurance. 21 * Sec. 52. AS 21.34.190(a) is amended to read: 22 (a) The fee for filing the statement under AS 21.34.180(b) is an amount equal 23 to one percent on gross premium charged less any return premiums during the 24 preceding calendar year [QUARTER]. The surplus lines broker shall pay the fee at 25 the time of filing of the statement. 26 * Sec. 53. AS 21.36.120(d) is amended to read: 27 (d) Nothing in this section may be construed as prohibiting the payment of 28 commissions or other compensation to persons duly transacting business under 29 AS 21.27 [LICENSED AGENTS OR SOLICITORS], or as prohibiting an insurer from 30 allowing or returning to its participating policyholders, members, or subscribers, lawful 31 dividends, savings, or unabsorbed premium deposits.
01 * Sec. 54. AS 21.36.160 is amended to read: 02 Sec. 21.36.160. RIGHT OF DEBTOR OR BORROWER TO SELECT 03 INSURANCE PRODUCER [AGENT, BROKER,] AND INSURER. If property 04 insurance is required in connection with a debt or loan, the debtor or borrower has the 05 reasonable right to select the insurance producer [AGENT, BROKER,] and insurer 06 through whom the insurance is to be placed if (1) the insurance is provided for the 07 protection of the creditor's or lender's interest in the property at the commencement of 08 the risk; or (2) in the case of renewal of insurance, the renewal policy is delivered to 09 the creditor or lender no later than 30 days before the renewal date. 10 * Sec. 55. AS 21.36.195 is amended to read: 11 Sec. 21.36.195. SURPLUS LINES BROKERS AND INSURANCE 12 PRODUCERS; PROHIBITED ACTS. A surplus lines broker or an insurance 13 producer may not fail to provide evidence [THE EVIDENCES] of insurance, 14 affidavits, filings, or reports, or fail to maintain the records, or fail to pay the taxes and 15 fees, required under AS 21.34. 16 * Sec. 56. AS 21.36.235(a) is amended to read: 17 (a) Except as provided in AS 21.36.305 [AS 21.36.420], if the renewal 18 premium is increased more than 10 percent for a reason other than an increase in 19 coverage or exposure base, or if after renewal there will be a material restriction or 20 reduction in coverage not specifically requested by the insured, written notice shall be 21 mailed to the insured and to the agent or broker of record as required by AS 21.36.260 22 (1) at least 20 days before expiration of a personal insurance policy; 23 or 24 (2) at least 45 days before expiration of a business or commercial 25 policy. 26 * Sec. 57. AS 21.36.290 is amended to read: 27 Sec. 21.36.290. POLICY PERIOD. Except as described in (b) of this 28 section, a [A] policy with a policy period or term of less than 12 months shall, for the 29 purposes of AS 21.36.210 - 21.36.310, be considered to be written for a policy period 30 or term of 12 months except in case of cancellation under any of the circumstances 31 specified in AS 21.36.210, and a policy written for a term longer than one year or a
01 policy with no fixed expiration date shall be considered to be written for successive 02 policy periods or terms of one year and termination by an insurer effective on an 03 anniversary date of the policy shall be considered a failure to renew. 04 * Sec. 58. AS 21.36.290 is amended by adding a new subsection to read: 05 (b) For determining the appropriate rate or premium, a personal automobile 06 insurance policy with a policy period or term of less than six months shall, for the 07 purposes of AS 21.36.210 - 21.36.310, be considered to be written for a policy period 08 or term of six months. 09 * Sec. 59. AS 21.36 is amended by adding a new section to read: 10 Sec. 21.36.305. PREMIUM INCREASES ON PERSONAL AUTOMOBILE 11 INSURANCE POLICIES. (a) An insurer may not increase the premium on a personal 12 automobile insurance policy unless the increase applies to all insureds of the same 13 class. 14 (b) An insurer may not increase the premium or add a surcharge to a personal 15 automobile insurance policy because of the issuance of a citation for a moving traffic 16 violation unless the insured or another person who resides in the insured's household 17 and is covered by the policy has been convicted of the violation or has entered a plea 18 of no contest to the violation. 19 (c) The director shall adopt regulations to determine circumstances under 20 which an insurer may increase the premium or add a surcharge to a personal 21 automobile insurance policy. 22 (d) An insurer that increases the premium or adds a surcharge to a personal 23 automobile insurance policy may only make the increase or surcharge effective on the 24 renewal date of the policy. 25 (e) An insurer that increases the premium or adds a surcharge to a personal 26 automobile insurance policy shall give written notice of the increase or surcharge at 27 least 20 days before it takes effect, stating the reason for the change and the right of 28 appeal under AS 21.39.090. This subsection does not apply to 29 (1) premium increase resulting from a change requested by an insured, 30 if the insured is notified at the time the request is made that the amount of the 31 insured's premium will change as a result of the requested policy change; or
01 (2) rate approved by the director if the insurer gives written notice of 02 a premium increase to the insured at least 20 days before the renewal date of the 03 affected policy. 04 * Sec. 60. AS 21.36.360(i) is amended to read: 05 (i) A criminal insurance act is committed by a person [AN INSURER] doing 06 business in this state or relative to a subject resident, located, or to be performed 07 in this state who knowingly 08 (1) writes, places, or causes to be written or placed in this state or 09 relative to a subject resident, located, or to be performed in this state a policy, 10 duplicate policy, or contract of insurance of any kind or character, or general or 11 floating policy upon persons or property resident, situated, or located in this state, from 12 or through a person not authorized to transact business under AS 21.27 or a risk 13 retention group or purchasing group not registered under AS 21.89.070 14 [BROKER, AGENT, SURPLUS LINE BROKER, OR PERSON WHO HAS NOT 15 SECURED A GENERAL AGENT LICENSE IN THIS STATE]; or 16 (2) pays a commission or other form of remuneration to a person, firm, 17 or organization for the writing or placing of insurance coverage in this state or relative 18 to a subject resident, located, or to be performed in this state unless that person, 19 firm, or organization is authorized under AS 21.27 to transact [HOLDS A LICENSE 20 ISSUED BY THE DIRECTOR FOR] the kind or class of insurance written or placed, 21 or, in the case of a risk retention group or purchasing group, is registered under 22 AS 21.89.070. 23 * Sec. 61. AS 21.36.360(j) is amended to read: 24 (j) A criminal insurance act is committed by a person in this state or relative 25 to a subject resident, located, or to be performed in this state who acts as an 26 insurance producer, managing general agent, third-party administrator, 27 reinsurance intermediary broker, reinsurance intermediary manager, surplus lines 28 broker [SOLICITOR], or independent adjuster without being licensed by the director 29 as required under this title or as a risk retention group or purchasing group 30 without being registered as required under AS 21.89.070. A criminal insurance act 31 is committed by an insurance producer, managing general agent, third-party
01 administrator, reinsurance intermediary broker, reinsurance intermediary 02 manager, or surplus lines broker [OR SOLICITOR] who solicits or takes application 03 for, procures, or places for others any insurance for which the person is not licensed 04 as required under AS 21.27 or for which the license of the person has been 05 suspended or revoked. A criminal insurance act is committed by a person in this 06 state or relative to a subject resident, located, or to be performed in this state who 07 acts as or on behalf of a risk retention group or a purchasing group that is not 08 registered under AS 21.89.070 [THIS SUBSECTION DOES NOT APPLY TO A 09 PERSON DESCRIBED IN AS 21.90.910 OR TO A PERSON SECURING AND 10 FORWARDING INFORMATION REQUIRED FOR THE PURPOSE OF A GROUP 11 INSURANCE COVERING THE UNPAID BALANCE OR REMAINING PAYMENTS 12 PROPOSED TO BE MADE IN CONNECTION WITH THE PURCHASE OF 13 MERCHANDISE OR SERVICES IF NO COMMISSION OR OTHER 14 COMPENSATION IS PAYABLE ON ACCOUNT OF THE INSURANCE TO THE 15 PERSON]. 16 * Sec. 62. AS 21.36.360(k) is amended to read: 17 (k) A criminal insurance act is committed by an insurance producer, 18 managing general agent, [GENERAL AGENT,] third-party administrator, 19 reinsurance intermediary broker, reinsurance intermediary manager, or surplus 20 lines broker [OR SOLICITOR] who knowingly compensates or offers to compensate 21 in any manner a person other than an insurance producer, managing [AGENT,] 22 general agent, third-party administrator, reinsurance intermediary broker, 23 reinsurance intermediary manager, or surplus lines broker [OR SOLICITOR] 24 licensed as required under this title in this or another jurisdiction [STATE OR 25 PROVINCE], for procuring or in any manner helping to procure applications for or to 26 place insurance in this state. A criminal insurance act is committed by a person in 27 this state or relative to a subject resident, located, or to be performed in this state 28 who acts as or on behalf of a risk retention group or a purchasing group that is 29 not registered under AS 21.89.070. This subsection does not apply to the payment 30 of compensation that is not contingent upon volume of business transacted in the form 31 of salaries to the regular employees of the insurance producer, managing general
01 agent, third-party administrator, reinsurance intermediary [GENERAL AGENT,] 02 broker, reinsurance intermediary manager, or surplus lines broker [OR 03 SOLICITOR]. 04 * Sec. 63. AS 21.36.360(n) is amended to read: 05 (n) A criminal insurance act is committed by an agent, managing general 06 agent, third-party administrator, reinsurance intermediary broker, reinsurance 07 intermediary manager, or other representative of an insurer involved in the procuring 08 or issuance of an insurance contract who intentionally fails to report to the insurer the 09 exact amount of consideration charged as premium for the contract and to maintain 10 records showing that information. 11 * Sec. 64. AS 21.36.360(p) is amended to read: 12 (p) A fraudulent insurance act is committed by a person who 13 (1) violates a provision of this title or a regulation issued under it; 14 (2) falsely makes, completes, or alters a certificate of insurance or 15 other document relating to insurance; 16 (3) knowingly possesses a forged certificate of insurance or other 17 document relating to insurance; or 18 (4) knowingly issues a forged certificate of insurance or other 19 document relating to insurance. 20 * Sec. 65. AS 21.36.360(q) is amended to read: 21 (q) A fraudulent or criminal insurance act described in 22 (1) (b) of this section that is committed to obtain $10,000 or more is 23 a class B felony; 24 (2) (c) or (d) of this section is a class B felony; 25 (3) (b) of this section that is committed to obtain $500 or more but less 26 than $10,000 is a class C felony; 27 (4) (e), (f), (g), or (h), of this section is a class C felony; 28 (5) (b) of this section that is committed to obtain less than $500 is a 29 class A misdemeanor; 30 (6) (i), (j), (k), (l), (m), or (n) of this section is a class A misdemeanor; 31 (7) (o) of this section is a class B misdemeanor; [AND]
01 (8) (p)(1) [(p)] of this section is a class B misdemeanor unless another 02 specific penalty is provided for the violation of the provision; and 03 (9) (p)(2) - (4) of this section may be prosecuted under AS 11.46. 04 * Sec. 66. AS 21.36.380 is amended to read: 05 Sec. 21.36.380. NOTICE ON CLAIM FORM. A claim form must contain a 06 statement that states in substance the following: "A person who knowingly and with 07 intent to injure, defraud, or deceive an insurance company files a claim containing 08 false, incomplete, or misleading information may be prosecuted under state law [IS 09 GUILTY OF A FELONY]." A lack of the statement on a claim form does not 10 constitute a defense to prosecution under this title. 11 * Sec. 67. AS 21.39.040 is amended by adding new subsections to read: 12 (j) An insurer who has submitted an application for a certificate of authority 13 under AS 21.09.110 and a filing of policy forms under AS 21.42.120 may file a 14 proposed rating system as described in this section. The director's approval of the 15 rating system is contingent upon the issuance of a certificate of authority under 16 AS 21.09.120. 17 (k) The director may adopt regulations detailing the format and content of a 18 rating system filing under this section. 19 * Sec. 68. AS 21.39 is amended by adding a new section to read: 20 Sec. 21.39.055. CANCELLATION OF APPROVED FILING. The voluntary 21 surrender of a certificate of authority or the failure of the surrendering admitted foreign 22 insurer to continue a certificate of authority in force has the effect of cancelling an 23 approval that the insurer may have received under this chapter, unless the approval has 24 been affirmed by the director at the time of the surrender or noncontinuation of the 25 certificate of authority. 26 * Sec. 69. AS 21.39.155(a) is amended to read: 27 (a) The director may require insurers [CARRIERS], except a reciprocal 28 insurer formed by and insuring only a group of municipalities or nonprofit public 29 utilities under AS 21.75 or a reciprocal insurer formed under AS 21.75 to provide 30 marine insurance, [OR A JOINT INSURANCE ARRANGEMENT FORMED UNDER 31 AS 21.76,] as a condition of writing a line of insurance dealing with medical
01 malpractice or workers' compensation, to participate in an assigned risk pool if the 02 director finds that mandatory carrier participation is in the public interest. 03 * Sec. 70. AS 21.42.120 is amended by adding new subsections to read: 04 (f) This section does not apply to a type of insurance subject to AS 21.57. 05 (g) An insurer who has submitted an application for a certificate of authority 06 under AS 21.09.110 may file a proposed policy form as described in this section. The 07 director's approval of the policy form is contingent upon the issuance of a certificate 08 of authority under AS 21.09.120. 09 (h) The director may adopt regulations detailing the format and content of the 10 filing of a policy form under this section. 11 * Sec. 71. AS 21.42.345 is amended by adding a new subsection to read: 12 (b) An insurer authorized under AS 21.09 to offer, issue for delivery, deliver, 13 or renew an individual or group disability insurance policy for medical coverage on 14 an expense incurred basis in the state, a hospital or medical service corporation 15 authorized under AS 21.87 to offer or renew an individual or group subscriber's 16 contract for medical coverage in the state, or a health maintenance organization 17 authorized under AS 21.86 to offer an enrollee contract to provide health care services 18 on a prepaid basis shall offer coverage for family members, including newly born 19 children, adopted children, or children placed for adoption and is subject to the 20 conditions in (a) of this section, regardless of the marital status of the covered person. 21 * Sec. 72. AS 21.42.353 is amended to read: 22 Sec. 21.42.353. COVERAGE FOR COSTS OF ACUPUNCTURE 23 TREATMENT. An insurer authorized under AS 21.09 to offer, issue for delivery, 24 deliver, or renew a disability insurance policy in the state, [OR] a hospital or medical 25 service corporation authorized under AS 21.87 to offer or renew a subscriber's contract, 26 or a health maintenance organization authorized under AS 21.86 to offer an 27 enrollee contract to provide health care services on a prepaid basis may offer 28 coverage for services of an acupuncturist licensed under AS 08.06 if the policy or 29 contract covers acupuncture treatment by a health care provider who is subject to other 30 provisions of AS 08. 31 * Sec. 73. AS 21.42.355 is amended to read:
01 Sec. 21.42.355. COVERAGE FOR COST OF SERVICES PROVIDED BY 02 NURSE MIDWIVES. (a) If an individual or group disability insurance policy, 03 subscriber's contract, enrollee contract, or fraternal benefit society certificate provides 04 indemnity for the cost of services of a physician provided to women during pregnancy, 05 childbirth, and the period after childbirth, indemnity in a reasonable amount shall also 06 be provided for the cost of an advanced nurse practitioner who provides the same 07 services. Indemnity may be provided under this subsection only if the advanced nurse 08 practitioner is certified to practice as a nurse midwife in accordance with regulations 09 adopted under AS 08.68.100(a), and the services provided are within the scope of 10 practice authorized by that certification. 11 (b) If an individual or group disability insurance policy, [A] subscriber's 12 contract, enrollee contract, or fraternal benefit society certificate provides for 13 furnishing those services required of a physician in the care of women during 14 pregnancy, childbirth, and the period after childbirth, the contract shall also provide 15 that an advanced nurse practitioner may furnish those same services instead of a 16 physician. Services may be provided under this subsection only if the advanced nurse 17 practitioner is certified to practice as a nurse midwife in accordance with regulations 18 adopted under AS 08.68.100(a), and the services provided are within the scope of 19 practice authorized by that certification. 20 * Sec. 74. AS 21.42.375(a) is amended to read: 21 (a) An insurer authorized under AS 21.09 to offer, issue for delivery, deliver, 22 or renew an individual or group disability insurance policy for medical coverage on 23 an expense incurred basis in the state, [OR] a hospital or medical service corporation 24 authorized under AS 21.87 to offer or renew a subscriber's contract for medical 25 coverage in the state, or a health maintenance organization authorized under 26 AS 21.86 to offer an enrollee contract to provide health care services on a prepaid 27 basis shall provide coverage for low-dose mammography screening under the schedule 28 described in (b) of this section if the policy or contract covers mastectomies and 29 prosthetic devices and reconstructive surgery incident to mastectomies. 30 * Sec. 75. AS 21.42.380 is amended to read: 31 Sec. 21.42.380. COVERAGE FOR TREATMENT OF PHENYLKETONURIA.
01 (a) An insurer authorized under AS 21.09 to offer, issue for delivery, deliver, or 02 renew an individual or a group disability insurance policy for major medical coverage 03 on an expense-incurred basis in the state, [OR] a hospital or medical service 04 corporation authorized under AS 21.87 to offer or renew a group contract for major 05 medical coverage in the state, or a health maintenance organization authorized 06 under AS 21.86 to offer an enrollee contract to provide health care services on a 07 prepaid basis shall [MUST] provide coverage for the formulas necessary for the 08 treatment of phenylketonuria. This subsection does not apply to 09 (1) a Medicare supplement insurance policy; 10 (2) long-term care insurance; 11 (3) an insurance policy regulated under 5 U.S.C. 8901 - 8914 or 42 12 U.S.C. 1395mm; 13 (4) an insurance policy that provides services or reimbursement 14 exclusively for optometric or vision care, dental or orthodontic care, podiatric, 15 ambulance, mental health, or chiropractic care; 16 (5) an insurance policy that the director has, in writing, determined 17 should be excluded from this subsection. 18 (b) The insurer, hospital or medical service corporation, or health 19 maintenance organization providing coverage under this section may impose 20 reasonable contract limitations but may not refuse coverage based on a preexisting 21 condition of phenylketonuria or require that the insured or subscriber pay a higher 22 deductible or copayment for the cost of treating phenylketonuria than for the cost of 23 treating another condition or illness. 24 (c) In this section, 25 (1) "copayment" means the portion of the cost to be paid by the 26 insured, [OR] subscriber, or enrollee in excess of the deductible; 27 (2) "cost" means the lowest of the following: 28 (A) the actual charge for the treatment received for 29 phenylketonuria; 30 (B) the usual, customary, and reasonable charge for the 31 treatment as determined by the contract of coverage; or
01 (C) the charge agreed to by contract between the provider and 02 the insurer, hospital [SERVICE CORPORATION,] or medical service 03 corporation, or health maintenance organization; 04 (3) "deductible" means the portion of covered costs that must be 05 incurred before benefits become payable; 06 (4) "long-term care insurance" has the meaning given in AS 21.53.200; 07 (5) "major medical coverage" means a disability insurance contract, 08 [OR] a subscriber contract, or an enrollee contract that provides benefits for hospital 09 and medical care with potential lifetime maximum benefits for the insured, [OR] 10 subscriber, or enrollee of at least $10,000. 11 * Sec. 76. AS 21.56.180(c) is amended to read: 12 (c) Except as provided in this subsection, a small employer insurer may not, 13 directly or indirectly, enter into a contract, agreement, or arrangement with an 14 insurance producer [AGENT, BROKER], managing general agent, or third-party 15 administrator that provides for or results in the compensation paid to an insurance 16 producer [AGENT OR BROKER] for the sale of a health benefit plan to be varied 17 because of the health status, claims experience, industry, occupation, or geographic 18 location of the small employer. This subsection does not apply to a compensation 19 arrangement that provides compensation to an insurance producer [AGENT, 20 BROKER], managing general agent, or third-party administrator on the basis of a 21 percentage of premium, provided that the percentage does not vary because of the 22 health status, claims experience, industry, occupation, or geographic area of the small 23 employer. 24 * Sec. 77. AS 21.56.180(d) is amended to read: 25 (d) A small employer insurer 26 (1) shall provide reasonable compensation, as provided under the plan 27 of operation of the program, to an insurance producer [AGENT, BROKER], 28 managing general agent, or third-party administrator, if any, for the sale of a basic or 29 standard health benefit plan; 30 (2) or insurance producer [AGENT, BROKER], managing general 31 agent, or third-party administrator may not induce or otherwise encourage a small
01 employer to separate or otherwise exclude an employee from health coverage or 02 benefits provided in connection with the employee's employment; 03 (3) may only deny an application for coverage from a small employer 04 in writing and if the reasons for the denial are stated. 05 * Sec. 78. AS 21.69 is amended by adding new sections to read: 06 Sec. 21.69.645. REDOMESTICATION. (a) An insurer organized under the 07 laws of another state and admitted to do business in this state may become a domestic 08 insurer of this state by complying with the requirements of this title relative to the 09 organization and licensing of a domestic insurer and by designating its principal place 10 of business at a place in this state. 11 (b) A domestic insurer may, upon approval of the director, transfer its domicile 12 to another state in which it is admitted to transact the business of insurance. Upon a 13 transfer as described in this subsection, the insurer shall cease to be a domestic insurer 14 of this state, but shall be considered admitted to this state. The insurer shall meet the 15 qualifications to remain admitted to this state for a period of three years or, if ordered 16 by the director, a longer period. The director may approve a proposed transfer unless 17 the transfer is not in the interest of the policyholders of the insurer or the insurance 18 marketplace of this state. 19 (c) Upon transfer of domestic status to or from this state, the certificate of 20 authority, appointments under AS 21.27.100, rates, and other items that the director 21 allows, and that are in existence at the time the insurer is licensed to transact the 22 business of insurance in this state, shall continue in full force and effect and the 23 insurer shall remain duly qualified to transact the business of insurance in this state. 24 Outstanding policies of a transferring insurer shall remain in full force and effect and 25 shall be endorsed with the new name of the company, its new location, and any other 26 information the director may require. A transferring insurer shall notify the director 27 of the details of the proposed transfer 30 days before the effective date of the transfer 28 and shall promptly file any resulting amendments to corporate documents filed or 29 required to be filed with the director. 30 (d) A transfer of domestic status by merger, consolidation, or any other lawful 31 method of combination must meet the requirements of AS 21.69.590 or 21.69.600.
01 The certificate of authority, appointments under AS 21.27.100, rates, and other items 02 that the director allows, and that are in existence at the time the insurer is licensed to 03 transact the business of insurance in this state, shall continue in full force and effect 04 and the insurer shall remain duly qualified to transact the business of insurance in this 05 state. Outstanding policies of a domestic insurer being merged, consolidated, or 06 otherwise combined shall remain in full force and effect and shall be endorsed with 07 the new name of the company, its new location, and any other information the director 08 may require. 09 (e) An insurer that is transferring its domicile to this state shall file its revised 10 policy forms for approval under AS 21.42. 11 (f) A domestic insurer that is transferring its domicile to another state is not 12 required to file policy forms at the time of transfer if the forms have already been 13 approved under AS 21.42. 14 Sec. 21.69.648. VOLUNTARY SURRENDER OF CERTIFICATE OF 15 AUTHORITY. To voluntarily surrender the certificate of authority of a domestic 16 insurer, a request shall be made to the director to extinguish the certificate of authority 17 six months before the planned effective date of the extinguishment of the charter. 18 Before the request is granted, the director shall conduct an examination under 19 AS 21.06.120. The examination shall be completed within 12 months before the 20 effective date of an extinguishment and all issues contained in the examination report 21 must be resolved to the satisfaction of the director. Insurance business of the domestic 22 insurer shall be cancelled or reinsured as required under AS 21.69.610 or 21.69.620. 23 * Sec. 79. AS 21.72 is amended by adding a new section to read: 24 Sec. 21.72.125. QUARTERLY STATEMENTS. The director may require a 25 benevolent association to file quarterly financial statements as provided in 26 AS 21.09.205. The statements must exhibit the items and facts required under 27 AS 21.72.120(a). 28 * Sec. 80. AS 21.75 is amended by adding a new section to read: 29 Sec. 21.75.135. QUARTERLY STATEMENTS. (a) The director may require 30 a reciprocal insurer's attorney-in-fact to file a quarterly financial statement as provided 31 in AS 21.09.205.
01 (b) A statement required under (a) of this section shall be supplemented by 02 information that may be required by the director relative to the affairs and transactions 03 of the attorney-in-fact that relate to the reciprocal insurer. 04 * Sec. 81. AS 21.75.170(e) is amended to read: 05 (e) Special meetings of the committee may be called by the attorney-in-fact, 06 the chair of the committee, three members of the committee, or a signed petition of 07 at least one percent of the subscribers or three individual subscribers, whichever is 08 greater, as of the most recent annual report of the reciprocal insurer. 09 * Sec. 82. AS 21.75.170 is amended by adding a new subsection to read: 10 (g) Notwithstanding (a) of this section, a domestic reciprocal insurer 11 transacting all of its insurance activities on a subject resident, located, or to be 12 performed in this state may, with the prior written approval of the director, have a 13 subscriber's advisory committee that consists of not less than five individuals who are 14 elected by the subscribers, and who otherwise meet the requirements of (a) of this 15 section. 16 * Sec. 83. AS 21.78.130(g) is amended to read: 17 (g) If it appears to the receiver that there has been a violation of civil or 18 criminal law, or breach of a contractual or fiduciary obligation detrimental to the 19 insurer by an officer, manager, insurance producer [AGENT, BROKER], employee, 20 or other person, the receiver may pursue all appropriate legal remedies on behalf of 21 the insurer. 22 * Sec. 84. AS 21.78.271(a) is amended to read: 23 (a) An 24 (1) insurance producer [AGENT, BROKER], premium finance 25 company, or any other person, other than the insured, responsible for the payment of 26 a premium is obligated to pay an unpaid earned premium due the insurer at the time 27 of the declaration of insolvency, as shown on the records of the insurer; neither a 28 credit nor a setoff is allowed to an insurance producer [AGENT, BROKER,] or 29 premium finance company for an amount advanced to the insurer by the insurance 30 producer [AGENT, BROKER,] or premium finance company on behalf of, but in the 31 absence of a payment by, the insured;
01 (2) insured is obligated to pay an unpaid earned premium due the 02 insurer at the time of the declaration of insolvency, as shown on the records of the 03 insurer. 04 * Sec. 85. AS 21.79.900(6) is amended to read: 05 (6) "member insurer" means an insurer licensed to transact insurance 06 in the state that issues a policy described in AS 21.79.020(a) and (b), or a subscriber 07 contract providing benefits described in AS 21.87.120(a)(2) - (4) or 21.87.130(a)(2) 08 and (3), and includes an insurer whose license or certificate of authority in this state 09 may have been suspended, revoked, not renewed, or voluntarily withdrawn; "member 10 insurer" does not include 11 (A) a health maintenance organization licensed under 12 AS 21.86; 13 (B) a fraternal benefit society licensed under AS 21.84; 14 (C) a mandatory state pooling plan; 15 (D) a mutual assessment company or an entity that operates on 16 an assessment basis; 17 (E) an insurance exchange licensed under AS 21.75; or 18 (F) a nonprofit hospital or medical service organization 19 licensed under AS 21.87; 20 * Sec. 86. AS 21.80.020 is amended by adding a new subsection to read: 21 (b) This chapter does not apply to a risk retention group formed under 15 22 U.S.C. 3901 - 3906 (Liability Risk Retention Act). 23 * Sec. 87. AS 21.84.340 is amended by adding a new subsection to read: 24 (d) The director may require a society to file quarterly financial statements. 25 If quarterly financial statements are required, the statements must follow for a given 26 quarter the reporting specified in the quarterly financial statement blank form and 27 instructions most recently approved by the National Association of Insurance 28 Commissioners. 29 * Sec. 88. AS 21.86.080 is amended by adding new subsections to read: 30 (b) The director may require a health maintenance organization to file quarterly 31 financial statements. If quarterly financial statements are required, the statements must
01 follow for a given quarter the reporting specified in the quarterly financial statement 02 blank form and instructions most recently approved by the National Association of 03 Insurance Commissioners. 04 (c) A filing under this section is subject to AS 21.09.200 and 21.09.205. 05 * Sec. 89. AS 21.89.030 is amended to read: 06 Sec. 21.89.030. PAYMENT. An insurance company doing business in this 07 state may not pay a judgment or settlement of a claim in this state for a loss incurred 08 in this state with an instrument other than a negotiable bank check payable on demand 09 and bearing even date with the date of writing or by electronic funds transfer. 10 * Sec. 90. AS 21.89 is amended by adding new sections to read: 11 Sec. 21.89.080. ELECTRONIC DATA TRANSFER. The director may adopt 12 regulations to facilitate electronic data transfer. Electronic data transferred under 13 regulations may, at the discretion of the director, be in place of another method of 14 filing or communication otherwise required under this title. 15 Sec. 21.89.090. RISK RETENTION GROUPS AND PURCHASING GROUPS. 16 (a) A risk retention group or a purchasing group formed under and in compliance with 17 15 U.S.C. 3901 - 3906 (Liability Risk Retention Act) shall register with the director 18 and shall at all times transact business in compliance with federal law and with the 19 laws of this state that are not preempted by federal law. 20 (b) A risk retention group or a purchasing group shall apply for initial 21 registration on forms prescribed by the director. Payment of a registration fee 22 established under AS 21.06.250 shall be submitted with the application. 23 (c) A risk retention group or a purchasing group may continue its registration 24 if it is in compliance with federal law. Payment of an annual continuation fee 25 established under AS 21.06.250 shall be submitted with the continuation application. 26 (d) A risk retention group holding a valid certificate of authority as a domestic 27 insurer or a purchasing group duly licensed under AS 21.27 as a resident license is not 28 required to be additionally registered under this section. 29 (e) In addition to any other penalty provided by law, a person that the director 30 determines under AS 21.06.170 - 21.06.240 has violated a provision of this title 31 relative to a risk retention group or a purchasing group is subject to a civil penalty of
01 not more than $10,000 for a violation or, if the director determines that the person 02 wilfully violated a provision of this title, a civil penalty of not more than $25,000 for 03 a violation. 04 (f) The director may adopt regulations on the operation and reporting 05 requirements of a risk retention group that are not in conflict with 15 U.S.C. 3901 - 06 3906 (Liability Risk Retention Act). 07 * Sec. 91. AS 21.90.900(26) is amended to read: 08 (26) "managing general agent" means a person, firm, or corporation that 09 (A) has authority to exercise general supervision over the 10 business, or any part of the business, of one or more admitted insurers; and 11 (B) performs administrative functions normally performed by 12 the insurer including claims administration and payment, marketing 13 administration, agent appointment, premium accounting, premium billing, 14 coverage verification, final underwriting authority, or [AND] certificate 15 issuance; 16 * Sec. 92. AS 21.90.900(28) is amended to read: 17 (28) "person" has the meaning given in AS 01.10.060 and includes an 18 insurer, Lloyd's, fraternal benefit society, medical service, or hospital service plan as 19 defined in AS 21.87, reciprocal or interinsurance exchange, syndicate, and any other 20 legal entity engaged in the business of transacting insurance [, INCLUDING AGENTS, 21 BROKERS, AND CLAIMS ADJUSTERS]; 22 * Sec. 93. AS 28.20.580 is amended to read: 23 Sec. 28.20.580. ASSIGNED RISK PLANS. After consultation with the 24 insurance companies authorized to issue motor vehicle liability policies in this state, 25 the director of the division of insurance shall approve a reasonable plan, fair to the 26 insurers and equitable to their policyholders, for the apportionment among these 27 companies of applicants for motor vehicle policies and other vehicle coverages who 28 are in good faith entitled to but are unable to procure policies through ordinary 29 methods. When a plan is approved, all the insurance companies shall subscribe to it 30 and participate in it, except a reciprocal insurer formed by and only insuring a 31 group of municipalities or nonprofit utilities under AS 21.75, or a reciprocal
01 insurer formed under AS 21.75 to provide marine insurance. An applicant for an 02 assigned risk policy, a person insured under an assigned risk plan, and an insurance 03 company affected may appeal to the commissioner of commerce and economic 04 development from a ruling or decision of the authority designated to operate the plan. 05 Failure to adopt an assigned risk plan does not relieve any person from responsibility 06 under this chapter. 07 * Sec. 94. AS 39.25.110 is amended by adding a new paragraph to read: 08 (30) a person employed as an actuary or assistant actuary by the 09 division of insurance in the Department of Commerce and Economic Development. 10 * Sec. 95. AS 21.18.110(b)(3); AS 21.27.650(f)(3); and AS 21.36.420 are repealed. 11 * Sec. 96. AS 21.09.300(c), enacted in sec. 14 of this Act, has the effect of amending 12 Alaska Rule of Civil Procedure 45, by providing that certain insurer reports of material 13 transactions are not subject to subpoena. 14 * Sec. 97. TRANSITION. This Act applies to a policy of insurance that is entered into 15 or renewed on or after the effective date of the relevant provision of this Act. 16 * Sec. 98. Sections 69 and 93 of this Act are retroactive to January 1, 1983. 17 * Sec. 99. Except as provided in sec. 98 of this Act, this Act takes effect July 1, 1995.